“French Antitrust Case Against Nvidia to Combat AI Dominance”

France is also taking on Nvidia in the courts after a police raid in September. As a dominant supplier of AI chips, the company is said to be taking anti-competitive stances.

In a report on the generative AI market on Friday, France’s competition watchdog said there was a high risk that chipmakers would abuse their dominant position. According to Reuters, that’s not all the French government agency is doing. It said an antitrust case was in the works, even if it wouldn’t be officially announced anytime soon.

Software, not hardware

The exact nature of the allegations will become clear in due course. However, the watchdog has already raised several issues in the report that it finds troubling. While Nvidia’s market share of GPUs in data centers worldwide is 98 percent, it is not that specific dominance that is at issue in the antitrust case.

While there’s a chance it could give OEMs like Dell, HPE, and Lenovo a much less favorable deal than before, given the shortage of Nvidia chips, there’s no sign of such a move. Nevertheless, it would be in line with expectations, as Nvidia allows very minimal profit margins for third parties, whenever it can. This has been the case for years with GPU partners like ASUS, MSI, and Gigabyte, who turn Nvidia chips into complete graphics cards with a PCB and cooler, targeting the consumer market. The more successful and dominant Nvidia is, the smaller the margins for these partners. On the server side, a similar process has yet to happen. Last year, due to shortages, Nvidia was already forced to prioritize partners in this area that had been working with the GPU giant for a long time.

Instead, CUDA, Nvidia’s homegrown API for optimal AI acceleration, is France’s main stumbling block. It’s a closed-source solution that doesn’t run on Intel or AMD GPUs. Translation layers aren’t allowed.

A chance for change to occur

If the antitrust case does indeed focus on CUDA, it has some chance of making changes. After all, there are alternatives like oneAPI and OpenVINO Toolkit that allow AI developers to go open source. It should be noted that these options also work on Nvidia chips. Developers can already move away from CUDA without changing GPU vendors.

The French might want to reverse the ban on CUDA translation layers. This would allow users to run CUDA-based software on Intel or AMD hardware. The return of features such as the ZLUDA translator would be possible as a result.

In any case, Reuters reports that France is now in charge of bringing the case. With the French already preparing to file charges against Nvidia, the European Commission is said to be holding off on bringing its own case for now. The maximum penalty is 10 percent of Nvidia’s annual revenue, although a smaller fine or concessions from the AI ​​chip maker are more likely. Indeed, if the company is willing to make changes that please the French, there may not be a financial penalty.

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