The European Commission announced on Thursday that U.S. semiconductor giant Nvidia will need to obtain antitrust clearance for its planned acquisition of Israeli AI startup Lan. The move comes amid concerns that the partnership could hurt competition within the sectors in which both companies operate, Reuters reported.
EU regulators are concerned that the deal could distort competition and may require concessions from Nvidia to get approval for the deal. The scrutiny reflects a broader trend among regulators in both Europe and the United States to increase scrutiny of acquisitions of small startups by tech companies. Such acquisitions often raise concerns that they eliminate future competition by absorbing potential rivals, as regulators have noted.
As TechCrunch reported, Nvidia’s intention to acquire Run was first announced in April, with the deal reportedly valued at around $700 million. Run specializes in technology that enables teams and developers to effectively manage and optimize their AI infrastructure. This service is increasingly in demand as AI applications become more popular.
Interestingly, the acquisition does not meet EU financial standards that would normally require review. However, after notifying the Italian competition authorities, the matter was referred to the European Commission, which accepted the request for further investigation. The European Commission expressed serious concerns about the potential impact of this transaction on competition within the European Economic Area, including in particular Italy.
Related: NVIDIA faces EU antitrust scrutiny over planned acquisition of AI startup Ran
The European Commission said in a statement that “this transaction could have a significant impact on competition in the markets in which Nvidia and Run operate.” This recognition underscores the high stakes involved in this transaction and the need for thorough investigation by regulators.
Nvidia said it intends to cooperate with regulators and stands ready to answer any inquiries regarding Run. An Nvidia spokesperson said, “After the acquisition closes, we will continue to bring AI to every cloud and enterprise, helping customers choose the systems and software solutions that work best for them.” This reassured those involved.
The acquisition comes at a time when Nvidia is experiencing remarkable success, generating significant profits and revenue from cutting-edge processors that have become essential to AI applications, including those used for training models such as ChatGPT. Ta.
Source: Reuters
