On 20 December 2024, the European Commission approved the proposed acquisition of Run:ai Labs Ltd, a start-up company making GPU orchestration software, by NVIDIA Corporation, a NASDAQ listed company in the global market for discrete GPUs for use in datacentres. The proposed acquisition was approved unconditionally after the national competition authority of Italy submitted a referral request to the Commission pursuant to Article 22 of the EU Merger Regulation. As the revenues of Run:ai were negligible, the transaction did not reach the notification thresholds. However, Italy used its call-in powers to review the transaction and to submit the referral request to the Commission, which the Commission accepted at the end of October 2024.
The transaction was notified to the Commission on 15 November 2024. After a little over a month, the Commission concluded that the proposed acquisition would not raise competition concerns on any of the markets examined, namely the supply of discrete GPUs for use in datacentres and GPU orchestration software, in the EEA or in Italy. Therefore, the transaction was cleared unconditionally.
The transaction serves as a good example that referrals under Article 22 do not always lead to extensive investigations and potential follow-on litigation, as in the case of Illumina/Grail. Although it has been argued that the national competition authorities’ call-in powers are a necessary mechanism to tackle the so-called killer acquisitions, it remains to be seen whether these benefits outweigh the mechanism’s disadvantages, namely the legal uncertainty and the negative impact it has on dealmaking at least in some industries.
