Nvidia is currently facing allegations of anti-competitive conduct from French antitrust authorities, according to individuals with knowledge of the matter. According to Reuters, the incident represents the first regulatory engagement of this kind against the company.
Investigation Origins
The investigation’s roots can be traced back to surprise inspections of Nvidia’s offices last September. These inspections were part of a larger probe into the cloud computing industry, particularly focusing on graphics cards.
The surge in demand for Nvidia’s chips, following the release of ChatGPT, has led to greater regulatory scrutiny. Both European and U.S. regulators have shown interest, with French authorities spearheading the investigation.
Industry Dominance Concerns
A recent report from the French antitrust body raised flags about possible monopolistic behavior by chip manufacturers in the AI sector. The report highlighted the industry’s dependence on Nvidia’s CUDA software, which is uniquely compatible with the required GPUs for high-speed computing.
Nvidia’s AI Investments Scrutinized
French regulators are also worried about Nvidia’s strategic investments in AI-centric cloud services like CoreWeave. These investments are perceived as efforts to consolidate Nvidia’s stronghold in the AI market.
Violations of French antitrust laws can result in fines up to 10% of a company’s global yearly revenue. Companies can, however, propose remedies to mitigate such penalties. Nvidia has not issued a statement regarding the investigation.
While French authorities are actively looking into Nvidia, the European Commission is not expected to expand its current review. The U.S. Department of Justice is also investigating Nvidia, working in tandem with the Federal Trade Commission.
Nvidia maintains an 80% share in the AI chip sector, according to CNBC. Huang remarked that the company’s extensive customer network enables continual innovation and growth, creating a positive feedback loop in the industry.
Last Updated on November 7, 2024 3:43 pm CET