Regulators finally approve Nvidia's $800m acquisition of Run:ai

Run:ai founders Omri Geller and Ronen Dar and investor S Fund's Aya Peterburg credit: Sharon Levin
Run:ai founders Omri Geller and Ronen Dar and investor S Fund's Aya Peterburg credit: Sharon Levin

The eight month delay in US approval of the deal saw Nvidia's share price rise over 70%, which will suit the Israeli company's founders and employers who will be paid in shares to remain with Run:ai.

In April, US AI chip giant Nvidia Corp. announced that it was acquiring Israeli AI infrastructure orchestration and management company Run:ai. Since then the acquisition stalled due to an investigation by the US antitrust regulator. But today the deal was closed 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 announcement of the deal in April and the closing of it over the past few days, Nvidia's share price rose over 70%. It is unlikely that the investors' returns have increased by the same percentage and it is possible that, as is customary in such deals that an arrangement was agreed that sets a range in the share's value, so that the value of the deal will not jump to the same extent. At the same time, the value of the retention plan for the entrepreneurs and employees, which was apparently given in Nvidia shares, has increased 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 Yokneam. Approval of the acquisition will allow Nvidia to expand the Israel development center as its main software development center outside the US. A few months ago, Nvidia acquired Israeli AI company Deci AI, which has also joined the company's expanded development center.

A retention bonus is usually given to employees and entrepreneurs to get them to work at the company for a certain number of years and not leave before then. Such compensation is given through a restricted stock unit (RSU), that is, a share that can be exercised only after a number of years, or that can be exercised in part at any predetermined time period.

In a blog post Run:ai founders Ronen Dar and Omri Geller wrote, "Today we conclude a chapter in the exceptional journey of Run:ai and are delighted to begin a new and exciting chapter with our officially joining Nvidia." Nvidia also welcomed completion of the deal but none of those involved referred to the lengthy investigation by US authorities that delayed the closing of the long-awaited deal and almost jeopardized Nvidia's expansion in Israel.

"Politico" website had revealed that in recent months the US Department of Justice was conducting an antitrust investigation into Nvidia's acquisition of the Israeli startup. Run:ai has developed a platform that allows more operations to be performed on Nvidia's graphics processors and saves the need to purchase more of its own processors. According to sources who spoke to "Politico", the regulator's concern was that Nvidia acquired the Israeli company in order to "suppress technology that could curb its main profit engine."

Nvidia, for its part, tried to prove that the acquisition would not harm the market and would not restrict use of Run:ai platform only to Nvidia customers. On the contrary, according to Run:ai's blog, it appears that Nvidia is trying to make the product accessible to as many users as possible outside of its ecosystem. Run:ai's platform will also be used by competing AI accelerators, including those of Intel and AMD, and it will be used not only by Nvidia's DGX cloud service customers, but also by customers interested in local (On-Prem) services or through external cloud providers such as Amazon, Google and Microsoft.

Published by Globes, Israel business news - en.globes.co.il - on December 30, 2024

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024

Run:ai founders Omri Geller and Ronen Dar and investor S Fund's Aya Peterburg credit: Sharon Levin
Run:ai founders Omri Geller and Ronen Dar and investor S Fund's Aya Peterburg credit: Sharon Levin
Israeli apartments Credit: Shutterstock Apartments sold and rented

A selection of recent real estate deals in Israel in Tel Aviv, Ramat Gan, Petah Tikva, Givat Shmuel, Tiberias and Dimona.

Infinity Tower Tel Aviv credit: Courtesy Hagag Group French investors buy 2 Tel Aviv apartments for NIS 27.5m

The two apartments are in Hagag Group's Infinity Tower in the Summeil district.

El Al plane credit: Shutterstock El Al receives state approval to distribute dividend

The Israeli airline has now announced that it will be able to distribute up to 30% of net profit in 2025 and up to 40% in 2026-2028.

Relocation credit: Michal Raz-Haimovitz How to turn the tech relocation tide

With thousands of tech employees leaving Israel, the Innovation Authority proposes measures that could reverse the trend.

groundcover founders credit: Yossi Yarom Israeli observability co groundcover raises $35m

groundcover has developed a “Bring Your Own Cloud” (BYOC) observability solution, redefining the architecture of a modern observability platform.

Tel Aviv Stock Exchange credit: Shutterstock MagioreStock Foreign investment in TASE hits five-year high

Foreign investors have been flocking to the Tel Aviv Stock Exchange in recent weeks, the TASE research department tells "Globes."

Elbit Systems tank turret systems credit: Elbit Systems Elbit Systems wins $100m tank turret systems deal

The Israel defense electronics company will supply its advanced UT30 MK2 unmanned turret systems to General Dynamics European Land Systems (GDELS) to be supplied to a NATO European country.

Tomer Weingarten Photo: PR Trump targets SentinelOne exec in act of revenge

The US administration has suspended the security clearance of the company's chef intelligence and public policy officer Chris Krebs and everyone associated with him.

Tel Aviv Stock Exchange share prices rising credit: Tali Bogdanovsky TASE opens sharply higher after Trump U-turn on tariffs

The pause is being interpreted as a climb down after US President Donald Trump admitted he had made the move to calm the markets.

Ashot Ashkelon credit: Ministry of Defense Up 250%, Ashot Ashkelon wins another Defense Ministry order

The Israeli defense company's share price has risen 250% in the past three years since FIMI Opportunity Funds acquired control.

Liad Agmon credit: Eyal Izhar Insight Partners Liad Agmon steps down as managing partner

Serial entrepreneur Agmon has served as a partner at Insight Partners Israel alongside Daniel Aronovitz who set up the Israel office.

Shekels credit: Shutterstock Vladerina32 Shekel slide resumes amid escalating tariff war

The Bank of Israel is not expected to intervene in the forex market despite the sharp depreciation of the shekel.

Nir Zuk credit: Inbal Marmari Palo Alto Networks mulls buying AI security co for $700m

Sources inform "Globes" that on Palo Alto's radar is Protect AI.

President Donald Trump hosts Prime Minister Benjamin Netanyahu credit: Reuters Kevin Mohatt Israeli officials confident on US tariff concessions

Senior Israeli figures believe that concessions could be tied to progress on strategic regional political issues that are important to President Trump.

Phoenix Investment House CEO Avner Hadad  credit: Tommy Harpaz "The market has priced in all the bad things"

Phoenix Investment House CEO Avner Hadad says US markets could continue to fall, but that we are close to interesting territory for patient investors.

Tel Aviv credit: Shutterstock Tel Aviv slips in World's Wealthiest Cities ranking

Tel Aviv's position as one of the world's wealthiest cities took a big knock over the past year as it slipped from 42nd to 48th in investment advisors Henley & Co.'s "World's Wealthiest Cities" Top 50 ranking.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018