Nvidia-Run:ai deal to be reviewed under EU’s merger rules

The European Union has put a halt to Nvidia’s plans to acquire Run, a Tel Aviv-based startup focused on AI workload management. Initially announced in April with a valuation of $700 million, the acquisition will now undergo a review by EU regulators following a referral from Italian competition authorities, as stipulated under the EU Merger Regulation (EUMR).

Nvidia is prohibited from proceeding with the acquisition until it notifies the European Commission and receives approval. This referral could extend the timeline for the deal by several weeks. If the Commission’s initial assessment uncovers significant competitive concerns, a more comprehensive investigation may be initiated, potentially leading to delays lasting months.

Although the proposed acquisition does not meet the standard notification thresholds required by the EUMR, EU regulations permit national regulators to alert the Commission if they believe the deal poses serious competition risks locally and could impact trade within the EU’s Single Market.

According to a press release from the Commission, “Italy submitted a referral request to the Commission under Article 22(1) of the EUMR. This provision allows member states to ask the Commission to examine mergers lacking an EU dimension that may affect trade and competition within their territories.” The acceptance of this referral indicates that the EU believes the acquisition meets the criteria for review under Article 22.

The Commission further noted that the merger could significantly impact competition in markets where both Nvidia and Run

operate, which likely spans the European Economic Area, including Italy. They have determined that they are well-equipped to analyze this transaction due to their expertise in related markets.

Nvidia has been instructed to formally notify the Commission about the transaction, which involves preparing documentation to inform regulators about the merger’s details for assessment.

In recent years, regulatory scrutiny of major technology firms has increased as authorities recognize the anti-competitive nature of their acquisitions of smaller companies and startups. This shift in approach is particularly relevant in the AI sector, where innovation heavily relies on limited critical resources, such as Nvidia’s GPUs, essential for training AI models. The concern over potential market concentration has prompted regulators to act more swiftly.

While no major enforcement actions have been taken yet, it will be intriguing to see the outcome of the Commission’s review.

Nvidia spokesperson John Rizzo shared a statement regarding the EU’s merger review, expressing the company’s willingness to address any inquiries from regulators about Run

. He added, “Once the acquisition is finalized, we will continue to enhance AI accessibility across various cloud and enterprise platforms, helping customers choose the best system and software solutions for their needs.”

This report has been updated with Nvidia’s comments.