Nvidia's $700M AI Ambition Faces European and US Regulatory Scrutiny

Nvidia's acquisition of Israeli AI startup Run:ai is under scrutiny in Europe due to competitive concerns. Although the deal does not meet the notification thresholds outlined by the EU Merger Regulation, the Italian authorities have expressed concerns over the transaction's potential impact on market competition under the Italian Competition Law.

The European Commission noted in a statement that it has the authority to review transactions that do not meet national turnover thresholds but may pose a specific risk to competition and align with other conditions under Italian law. The Commission is currently examining whether the acquisition could significantly affect competition in markets where both Nvidia and Run:ai are active.

A spokesperson for Nvidia commented on the matter, expressing the company’s willingness to address any queries from regulators regarding Run:ai. The spokesperson reiterated Nvidia's commitment to continue providing AI solutions across cloud and enterprise environments post-acquisition, ensuring customers have the best systems and software solutions available to them.

First announced in April, the acquisition of Run:ai by Nvidia was reportedly valued at approximately $700 million, though the financial terms were not officially disclosed. Run:ai is known for optimizing AI chip efficiency by enabling parallel workloads, thus reducing the need for multiple GPUs to complete tasks.

In addition to the EU's scrutiny, reports from August suggested that the U.S. Department of Justice is also reviewing the acquisition under antitrust considerations, highlighting the international attention and regulatory hurdles that Nvidia's strategic move faces.