The European Commission has approved unconditionally, under the EU Merger Regulation ('EUMR'), the proposed acquisition of Run:ai Labs Ltd (' Run:ai') by NVIDIA Corporation ('NVIDIA'). The Commission concluded that the transaction would raise no competition concerns in the European Economic Area ('EEA').
The transaction does not reach the notification thresholds set out in the EUMR as Run:ai's current revenues are negligible. It was notified in Italy, as required by the Italian Competition Act, upon request by the national competition authority, which used its "call-in" powers. Such powers enable the Italian authority to review transactions not meeting the relevant national turnover thresholds where it finds that a transaction may pose concrete risks for competition and the other conditions laid down in the Italian Competition Act are met. Italy submitted a referral request to the Commission pursuant to Article 22(1) of the EUMR. This provision allows Member States to request the Commission to examine a merger that does not have an EU dimension but affects trade within the Single Market and threatens to significantly affect competition within the territory of the Member State(s) making the request. On 31 October 2024 , the Commission's accepted Italy's request and the transaction was notified to the Commission on 15 November 2024.
The Commission's investigation
NVIDIA designs and supplies Graphic Processing Units ('GPUs'), a type of semiconductor for datacentre applications. Run:ai supplies GPU orchestration software allowing corporate customers to schedule, manage and optimise their artificial intelligence compute infrastructure, whether on premises, in the cloud or in hybrid environments.
The Commission investigated the impact of the transaction on the markets for the supply of (i) discrete GPUs for use in datacentres; and (ii) GPU orchestration software.
The activities of NVIDIA and Run:ai do not overlap, but GPUs and GPU orchestration software must be compatible. The Commission assessed whether, post-transaction, NVIDIA would be able to hamper the compatibility between its GPUs and the GPU orchestration software of Run:ai's competitors, and the compatibility between Run:ai's software and the GPUs of NVIDIA's competitors.
Based on its market investigation, the Commission found that:
- NVIDIA likely holds a dominant position in the global market for discrete GPUs for use in datacentres. However, NVIDIA will have neither the technical ability nor the incentive to hamper the compatibility of its GPUs with competing GPU orchestration software due to the availability and widespread use of tools that ensure such compatibility, a point that has been confirmed by Run:ai's competitors.
- Run:ai does not have a significant position on the market for GPU orchestration software today. Customers will continue to have access to sufficient credible alternatives to Run:ai with similar advanced software features, as well as the possibility of building their GPU orchestration software in-house.
The Commission therefore concluded that the proposed acquisition would not raise competition concerns on any of the markets examined in the EEA or in Italy. It therefore cleared the transaction unconditionally.
Companies and products
NVIDIA, headquartered in the US, designs and supplies accelerated computing platforms including GPUs for datacentres, gaming, professional visualization, and automotive applications. NVIDIA also supplies network interconnect products and solutions. NVIDIA is listed on the NASDAQ.
Run:ai, headquartered in Israel, is a private start-up company that makes GPU orchestration software that helps customers schedule workloads on clusters of GPUs for use in datacentres.
Merger control and procedure
The transaction was notified to the Commission on 15 November 2024 following a referral request pursuant to Article 22(1) of the EUMR by the Italian national competition authority on 30 September 2024, which the Commission accepted on 31 October 2024 .
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EUMR ) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
