Nvidia (NVDA) has sued EU regulators, challenging their investigation into its acquisition of Israeli AI startup Run:ai. The chipmaker is dragging EU regulators to a special court in Luxembourg over their decision to accept Italy’s request to investigate the deal. However, the case does not impact the Run:ai deal, which the EU competition regulator approved in December following months of scrutiny.
Nvidia’s acquisition of Run:ai was a strategic fit, as the startup’s software is currently built exclusively for Nvidia GPUs. However, Run:ai plans to make its software open-source, enabling it to run on other GPUs. This shift could benefit Nvidia by extending its AI services to a wider audience beyond its current customers.
Nvidia Lawsuit to Challenge EU Merger Powers
The European Commission accepted Italy’s request to review Nvidia’s acquisition under EU merger rules. With this lawsuit, Nvidia aims to challenge the EU regulator’s authority over minor mergers. Nvidia stated that although the deal didn’t meet the usual EU notification thresholds, Italy’s competition authority, AGCM (Autorità Garante della Concorrenza), used its special “call-in” powers to assess it, citing potential competition risks.
As a result, Nvidia argues that the referral violated a previous court ruling that restricted regulators from reviewing deals below the EU’s revenue threshold, raising questions about the Commission’s authority over smaller mergers.
Additionally, Nvidia’s lawsuit cites a key ruling from last September, which states that the Commission cannot accept or encourage deal referrals from national regulators unless those regulators have the legal authority to review them.
Is Nvidia a Good Stock to Buy Now?
NVDA stock is in the spotlight as it is all set to announce its Q4 results on February 26. Wall Street remains bullish, with several analysts reaffirming their Buy ratings ahead of the earnings release.
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 31 Buys and two Holds assigned in the last three months. At $178.81, the Nvidia average share price target implies a 37.25% upside potential.
Year-to-date, NVDA stock has declined by 3%.
