French authorities are poised to charge Nvidia (NVDA.O) for purported anti-competitive behavior, according to sources familiar with the matter. This move marks the initial regulatory action against the prominent computer chip manufacturer.
Last September, regulators conducted dawn raids within the graphics cards sector, specifically targeting Nvidia, as part of a broader investigation into cloud computing practices. The investigation was prompted by a surge in demand for Nvidia’s chips following the introduction of ChatGPT, an AI application, drawing scrutiny from regulators on both sides of the Atlantic.
While the French Competition Authority, which occasionally discloses its statements of objections, and Nvidia declined to comment, the company disclosed in a previous regulatory filing that it had been requested for information by regulatory bodies in the European Union, China, and France regarding its graphic cards.
According to sources familiar with the matter, the European Commission is unlikely to expand its preliminary review at this time, as the focus remains on the French investigation into Nvidia.
In a report published last Friday on competition within generative AI, the French watchdog expressed concerns about potential abuses by chip providers. It specifically highlighted Nvidia’s CUDA chip programming software, which is crucial for GPUs used in accelerated computing, as a point of contention.
The report also raised alarms over Nvidia’s recent investments in AI-centric cloud service providers like CoreWeave. Under French antitrust regulations, companies found in violation could face fines up to 10% of their global annual turnover, although concessions may be offered to mitigate penalties.
Meanwhile, the U.S. Department of Justice, in collaboration with the Federal Trade Commission, is leading an investigation into Nvidia’s practices as part of broader scrutiny over Big Tech, according to a source familiar with the matter.
This development underscores growing regulatory challenges for Nvidia amidst its pivotal role in the AI and graphics chip industries.
