The French competition regulator has officially accused Nvidia of monopolizing the graphics card sector, marking the first official investigation targeting the world's leading chip maker.
According to information from Reuters, Nvidia received a "notice of protest", equivalent to an official indictment, after an unexpected investigation by French authorities since September 2023.
The investigation focuses on the graphics card sector, as part of a broader investigation into cloud computing.
Demand for Nvidia's chips has skyrocketed following the launch of AI-generating application ChatGPT, as it is a leading maker of chips used for both artificial intelligence (AI) and computer graphics. This growth spurt has drawn scrutiny from regulators on both sides of the Atlantic.
While Nvidia announced in a regulatory filing last year that it was being asked by regulators in the European Union, China and France to provide information related to its graphics card business, Both Nvidia and French authorities declined to officially comment on the latest allegations.
However, close sources said that the European Commission is unlikely to expand the preliminary investigation into Nvidia at the present time, because French authorities are actively investigating.
Concerns about the risk of abuse of monopoly positions from chip suppliers, especially in the context of AI booming, were clearly expressed by the French watchdog in a report on competition. in the field of generative AI, announced on June 28.
Specifically, the agency is concerned about the industry's reliance on Nvidia's CUDA chip programming software, the only system 100% compatible with GPUs, which has become essential for accelerated computing.
Besides, Nvidia's recent investments in AI-focused cloud service providers like CoreWeave are also a point of concern.
Nvidia's logo is seen at the annual Computex computer exhibition in Taipei, Taiwan on May 30.
If convicted, Nvidia risks facing a maximum fine of up to 10% of global annual revenue for violating French antitrust law. However, the company can offer concessions to avoid fines.
Nvidia's success in the AI craze has been proven by the company's dizzying valuation, which increased from $1 trillion in May 2023 to $2 trillion in February 2024 and $3 trillion in November. June 2024.
In the US, the Department of Justice is leading an antitrust investigation into Nvidia, Microsoft and OpenAI, to assess the influence of this trio on the AI industry. The investigation was conducted in June 2024, after the Department of Justice and the Federal Trade Commission divided responsibilities for supervising technology giants.
