In April, US AI chip giant Nvidia Corp announced that it had acquired an Israeli company to coordinate and manage AI infrastructure. Run: You have. The acquisition has since been halted due to an investigation by the US Antitrust Authority. But the deal was closed today after US and EU regulators gave their approval.
Nvidia will pay an estimated $800 million for Run:ai, of which the company’s founders and employees will receive $200 million. Between the deal’s announcement in April and its closing over the past few days, Nvidia’s stock price rose more than 70%. It is unlikely that investor returns would have increased by the same percentage, and it is possible, as is usual in such deals, for an arrangement to be agreed upon that specifies a range in the value of the stock, so that the value of the deal does not jump by the same amount. Meanwhile, the value of a retention plan for entrepreneurs and employees, which was apparently offered in Nvidia stock, has risen from about $100 million to nearly $200 in eight months, so they will benefit from the delay.
About 150 employees will join Nvidia’s offices in Tel Aviv and Yoknam. Approval of the acquisition will allow Nvidia to expand the Israeli development center as a major software development center outside the United States. A few months ago, Nvidia acquired the Israeli artificial intelligence company So artificial intelligencewhich also joined the company’s expanded development center.
A retention bonus is usually given to employees and entrepreneurs to get them to work for the company for a certain number of years and not leave before then. This compensation is granted through a restricted stock unit (RSU), i.e. a share that can only be exercised after a number of years, or can be partially exercised in any predetermined time period.
In a post on the Run:ai blog, Runen founders Dar and Omri Geller wrote: “Today we close a chapter in Run:ai’s extraordinary journey and are thrilled to begin an exciting new chapter by officially joining Nvidia.” Nvidia also welcomed the completion of the deal but none of those involved mentioned the lengthy investigation by US authorities that delayed the closing of the long-awaited deal and nearly jeopardized Nvidia’s expansion in Israel.
The Politico website revealed that the US Department of Justice had been conducting an antitrust investigation into Nvidia’s acquisition of the Israeli start-up company in recent months. Run:ai has developed a platform that allows more operations to be performed on Nvidia graphics processors and eliminates the need to purchase more of its own processors. According to sources who spoke to Politico, the regulatory body was concerned about Nvidia’s acquisition of the Israeli company in order to “suppress technology that could limit its main profit driver.”
Nvidia, for its part, tried to prove that the acquisition would not harm the market and would not restrict the use of the Run:ai platform to Nvidia customers only. On the contrary, according to the Run:ai blog, Nvidia appears to be trying to make the product accessible to as many users as possible outside of its ecosystem. The Run:ai platform will also be used by competing AI accelerators, including Intel and AMD, and will be used not only by customers of Nvidia’s DGX cloud service, but also by customers interested in on-prem or through services External. Cloud providers such as Amazon, Google, and Microsoft.
Published by Globes, Israel Business News – en.globes.co.il – on December 30, 2024
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