Nvidia Could Face French Ban – Antitrust Charges Could Follow Government Raids on Nvidia’s Offices in France

France’s Competition Authority is expected to soon accuse Nvidia of anti-competitive business practices, according to sources obtained by Reuters. The accusations come nine months after the Competition Authority raided Nvidia’s French offices, and they will hinge on Nvidia’s complete dominance of the AI computing space.

Nvidia, which recently became the world’s largest company by market capitalization (currently No. 3 at the time of writing), has climbed to this great peak thanks to the AI boom. Fueled by the development of ChatGPT and other generative AI solutions for consumers and machine learning for enterprise applications, Nvidia has established itself as the one-stop shop for AI gold shovels, as its graphics cards are the best solution for high-level AI computing. Billion-dollar orders, such as Elon Musk’s purchase of 100,000 H100 GPUs, have become routine headlines for Nvidia.

This monopoly is a source of concern for the French competition authority. Last Friday, the regulator published a report examining the state of the AI market and examining how much competition, and therefore innovation, is allowed in its current state. In that report, the competition authority raised concerns about the risk of abuse by chip suppliers. It specifically mentioned “the sector’s dependence on Nvidia’s CUDA chip programming software (the only one that is 100% compatible with (Nvidia’s) GPUs, which have become essential for accelerated computing).” Nvidia’s investments in AI cloud providers like CoreWeave were also a red flag, investment partnerships that could unfairly inflate Nvidia’s market performance.

The Office also outlines potential threats from chip suppliers, including price fixing, production restrictions, and unfair contractual terms/conduct. While Nvidia is not specifically accused of these potential offenses, it is the only chip supplier named in the report. The AI market’s overwhelming reliance on Nvidia hardware was not a major concern for the Office, which apparently considered alternative sources, such as Google’s TPU AI accelerators, to be sufficient competition.

Nvidia risks a maximum penalty of 10% of its annual global revenue in fines if it is found to violate French antitrust and anti-competition laws. It is assumed that the French government will seek to pass legislation against Nvidia and that Nvidia will receive the maximum penalty, an unlikely but stunning prospect for the tech giant.

The house that Huang built is also facing turbulent waters in the United States, where Nvidia is seeking an export license to ship its products to the heavily sanctioned Middle East. The FTC has continued to monitor Nvidia since blocking its $40 billion merger attempt with Arm in 2022.