France prepares to file antitrust charges against Nvidia over its dominance in artificial intelligence

French competition authorities are close to charging Nvidia Corp. with anti-competitive practices related to its dominant position in the AI ​​computer market, sources have reported.

Nvidia has become the world’s leading supplier of graphics processing units and the fast networking hardware needed to build the massive clusters required to train and run the most powerful AI models. By some estimates, Nvidia has an 80% share of the AI ​​infrastructure market, a fact that seems to have rankled the French competition authority, Auoritté de la Concurrence.

News of the impending charges was first reported today by Reuters and follows a raid on Nvidia’s offices in Paris by French authorities in September. The raid was aimed at gathering evidence for an antitrust investigation and was part of a broader probe by the agency into the cloud computing sector, which is looking into allegations that some U.S. companies may have hindered competition in the country.

Nvidia’s dominant position in AI computing recently propelled it to the position of the world’s most valuable company by market capitalization, though it has since fallen to third place. The company has become a major source of silicon during the generative AI boom that was sparked by the development of ChatGPT and other large language models.

It’s not yet clear what charges French regulators plan to bring against Nvidia, but last week the Autorité published a report that listed a number of “risks” for the chipmaker.

“The Autorité identified a number of potential risks, such as price fixing, production restrictions, unfair contract terms and discriminatory behaviour,” the report said.

He also raised concerns about the AI ​​industry’s dependence on Nvidia’s CUDA chip programming software. According to the report, CUDA is the only software available that is 100% compatible with Nvidia GPUs. Additionally, Nvidia’s investment in AI-focused cloud services provider CoreWeave Inc. has also been cited as a cause for concern.

It’s worth noting that regulators don’t have a specific problem with Nvidia’s GPUs being the dominant AI chip platform. The report notes that despite its dominance in the chip sector, Nvidia faces adequate competition in the form of AI accelerators from Google Cloud’s tensor processing unit and silicon from startups like Cerebras Systems Inc.

The report was part of a broader study of the competitive landscape of generative AI companies, which also examined access to computing infrastructure, data and talent.

If the company is found guilty of violating French antitrust and competition law, it could face fines of up to 10% of its global revenue, according to Reuters.

The chipmaker is also facing tough questions from antitrust regulators elsewhere. The European Union is also reportedly investigating the company to see if it is abusing its dominant market position, while in the US, the Justice Department is reportedly planning its own antitrust investigation into Nvidia as it has reportedly “begun to grow concerned” about its leading position in the AI ​​chip market.

Image: SiliconANGLE/Microsoft Designer