Broadcom gains conditional EU approval for VMware acquisition
Our top story today is that Broadcom has gained conditional approval from the EU Commission to acquire VMware for $61bn. After Broadcom announced plans to make the acquisition in May 2022, the Commission’s investigation found that the initial deal could harm the worldwide supply of FC HBAs by reducing interoperability between VMware’s software and competitors’ hardware. The revised deal, which gained conditional EU approval yesterday, now included guarantees of interoperability with Marvell and other competitors. The deal is now being examined by the FTC in the US and the CMA in the UK in order to determine whether legal merger clearance can be provided.
More broadly in the tech landscape, the Financial Times has reported that Meta will soon release a commercial AI model. The customisable model will be available for businesses to use in building new technology. The software, which is expected to be released in the near future, will differ from Open-AI’s model in that it will be open-source, with the source code made publicly available in a bid to facilitate collaborative innovation. This approach aligns with statements put forward in a separate FT piece written by Meta’s president of global affairs Nick Clegg in which he stated that “openness is the best antidote to the fears surrounding AI”.
Read more below for a round-up of the other major tech policy stories currently shaping the industry.
Google has announced that it will release its chatbot Bard in the EU after addressing the regulator’s privacy concerns. In June the Irish Data Protection Commission, a key EU regulatory body, stated that Google had not provided sufficient information to demonstrate compliance of Bard with the EU’s data protection rules leading to the release of the chatbot being delayed. After resolving these privacy concerns, Bard, which built on Google’s LaMDA software, had been made available in the EU.
Biotech company Illumina has been fined a record $476mn for proceeding with its takeover of Grail without EU antitrust approval. Having initially sought EU approval in 2021, Illumina completed the deal in August 2021 while the EU investigation was ongoing. The fine, which amounts to 10% of Illumina’s annual revenue, is the maximum percentage allowed for an intentional or negligent breach under the EU Merger Regulation. In a statement, the EU described the breach as unprecedented stating that Illumina had made a strategic decision to continue with the acquisition despite the regulatory breach after weighing potential profits.
Foxconn has targeted a new chip-making plan in India after withdrawing from a $19.5bn venture with Ventana. The companies entered into an agreement last year to open a semiconductor plant in the Indian state of Gujarat as part of a wider incentive by Prime Minister Narendra Modi to increase semiconductor manufacturing in India. Foxconn withdrew from the deal on Monday with Ventana now developing the project in Gujarat alone. Foxconn later announced that they remain committed to semiconductor manufacturing in India and will apply for alternative incentives.
The European Banking Authority (EBA) has called for the early adoption of EU stablecoin regulations that will come into effect in June 2024. The Markets in Crypto-Assets Regulation (MiCAR) was approved by the EU Parliament in April this year. One aspect of the regulation is set to govern the issuance of stablecoins, which are crypto assets with value tethered to a real-world currency or commodity. In anticipation of an increase in the number of stablecoins released in the coming months, the EBA has encouraged issuers to comply with the governance principles underpinning the MiCAR.
Reporting by Nick Scott. For a longer read:
What are the regulatory challenges posed by generative AI? by Juliet Baldwin
