France takes action against NVIDIA, files antitrust suit after investigation into anti-competitive practices – Firstpost

NVIDIA, the world’s largest maker of chips for artificial intelligence and computer graphics, is facing antitrust allegations from the French antitrust authority. According to sources familiar with the matter, this is the first enforcement action against NVIDIA in this context.

The French authorities’ “points of complaint” or indictment follow raids in the graphics card sector last September, which targeted NVIDIA. These raids were the result of a broader investigation into cloud computing.

NVIDIA has seen a surge in demand for its chips following the release of the generative AI application ChatGPT, which drew scrutiny from regulators on both sides of the Atlantic.

NVIDIA announced in a regulatory notice last year that regulators in the European Union, China and France had requested information about its graphics cards.

According to sources, it is unlikely that the European Commission will extend its preliminary investigation at this stage, given the ongoing investigation by the French regulator. The French regulator recently published a report highlighting competition concerns in the generative AI space, in particular the risk of misuse by chip suppliers.

The report specifically mentioned the sector’s dependence on NVIDIA’s CUDA chip programming software, the only system that is fully compatible with the GPUs required for accelerated computing. In addition, concerns were raised about NVIDIA’s recent investments in AI-focused cloud service providers such as CoreWeave.

Companies that violate French antitrust rules face fines of up to 10 percent of their annual global turnover, but they can also make concessions to avoid penalties. The U.S. Justice Department is leading an investigation into NVIDIA as it cedes control of Big Tech companies to the Federal Trade Commission, according to a source familiar with the matter.

In September last year, the French competition authority raided NVIDIA’s offices because it suspected anti-competitive practices. The French competition authority announced the raid without specifying the practices investigated or identifying the company concerned, other than to say it operated in the “graphics card sector.” The raid was part of a broader investigation into cloud computing and focused on concerns that cloud computing companies could use their access to computing power to shut out smaller rivals.

The operation targeted NVIDIA, the Wall Street Journal reported, citing people familiar with the raid.

Originally designed for computer graphics, NVIDIA’s chips are well suited for AI-related computing, contributing to the company’s significant market share.

After the release of ChatGPT late last year, demand for NVIDIA chips skyrocketed. With a combination of its chips, other hardware and powerful software, NVIDIA has achieved a market share of around 80 percent.

French authorities have taken a more aggressive stance against Big Tech recently. In September, France suspended sales of Apple’s iPhone 12 and threatened to recall it because radiation levels exceeded the limit. Apple then released a software update for the French market.

As the investigation into NVIDIA continues, the outcome could have significant implications for the chipmaker and the entire technology industry. The French antitrust authority’s actions demonstrate a robust approach to ensuring fair competition in rapidly evolving technology sectors.

Find us on YouTube

Subscribe to