Nvidia set to face French antitrust charges

• Nvidia is set to be charged by the French antitrust regulator for alleged anti-competitive practices, making it the first enforcer to take action against the computer chip maker.
• Companies risk fines of as much as 10% of their global annual turnover for breaching French antitrust rules, although they can also provide concessions to stave off penalties.

OUR TAKE
This incident will not only affect Nvidia’s business in the French market, but may also trigger a global scrutiny of its competition policy and market behavior. As cloud computing and data centres continue to grow, Nvidia’s actions as a major supplier are likely to be under increased regulatory scrutiny.
–Revel Cheng, BTW reporter

Nvidia will be prosecuted by the French antitrust regulator for alleged anti-competitive practices.

What happened

Nvidia, is set to be charged by the French antitrust regulator for allegedly anti-competitive practices, people with direct knowledge of the matter said, making it the first enforcer to act against the computer chip maker.

The French so-called statement of objections or charge sheet would follow dawn raids in the graphics cards sector in September last year, which sources said targeted Nvidia. The raids were the result of a broader inquiry into cloud computing.

The world’s largest maker of chips used for artificial intelligence and computer graphics has seen increased demand for its chips following the release of the generative AI application ChatGPT, triggering regulatory scrutiny on both sides of the Atlantic.

The French authority, which publishes some but not all of its statements of objections to companies, and Nvidia declined to comment. In a regulatory filing last year, the company stated that regulators in the European Union, China, and France had requested information on its graphics cards.

Also read: NVIDIA dethrones Microsoft as the world’s leading tech giant

Also read: How Nvidia dominates the AI chip market

Why it’s important

The European Commission is unlikely to expand its preliminary review for now, since the French authority is looking into Nvidia, other people with direct knowledge of the matter said.

The French watchdog in a report issued last Friday on competition in generative AI cited the risk of abuse by chip providers.

It voiced concerns regarding the sector’s dependence on Nvidia’s CUDA chip programming software, the only system that is 100% compatible with the GPUs that have become essential for accelerated computing.

It also cited unease about Nvidia’s recent investments in AI-focused cloud service providers such as CoreWeave.

Companies risk fines of as much as 10% of their global annual turnover for breaching French antitrust rules, although they can also provide concessions to stave off penalties.

The U.S. Department of Justice is leading the investigation into Nvidia as it shares the oversight of Big Tech with the Federal Trade Commission.