French antitrust authorities are reportedly preparing a lawsuit against AI infrastructure monopoly NVIDIA, which could spark outrage

Jul 02, 2024 11:13:00 AM

Laineema

French regulators are preparing to charge U.S. semiconductor maker NVIDIA with anti-competitive practices, Reuters reported. While the specific reasons for the accusations are unclear, it said the company’s near-monopoly in AI infrastructure has upset authorities.

Exclusive: Nvidia to face French antitrust charges, sources say | Reuters
https://www.reuters.com/technology/francuskie-regulatory-antymonopolowe-przygowują-opłatay-nvidii-źródła-powiedzią-2024-07-01/

France ready to press ‘charges against Nvidia’ • The Register

https://www.theregister.com/2024/07/01/french_contest_nvidia/

Reuters reported on July 2, 2024, citing people familiar with the matter, that French antitrust authorities intend to file charges against NVIDIA, the first law enforcement agency to take action against the company.

The lawsuit is said to follow a raid on NVIDIA’s French offices in September 2023. The investigation was conducted under the pretext of examining the current situation in the GPU industry, but sources say its purpose was to target NVIDIA.

It’s unclear what charges French authorities will bring, but Reuters noted that “the surge in demand for chips following the release of ChatGPT has put the world’s largest chipmaker, Nvidia, under the microscope of regulators on both sides of the Atlantic.”

The Register, an IT news site that covered the report, said: “Advances in AI have made Nvidia a leading supplier of graphics processing units and fast networks for training AI models. Nvidia’s share of the AI infrastructure market is estimated to exceed 80%, which has apparently angered French antitrust authorities.”

Meanwhile, neither French authorities nor NVIDIA have commented on the matter, but in regulatory filings in 2023, NVIDIA said it had received requests for information about its graphics cards from EU, Chinese and French authorities.

The people say it is unlikely the EU will expand its initial investigation because French regulators are also investigating Nvidia.

Before these reports were published, the French authorities expressed concerns in June 2024 about the AI industry’s dependence on NVIDIA solutions MIRACLES the only system fully compatible with GPUs, which are essential for high-speed computing. Authorities have also questioned NVIDIA’s ongoing investments in AI-focused cloud providers like CoreWeave.

If NVIDIA is found to have violated French antitrust law, the company could face fines of up to 10% of its global revenue, but the company may make concessions to avoid fines.