France pursues NVIDIA, files antitrust charges after investigation into anti-competitive practices – Firstpost

After ChatGPT was released late last year, demand for NVIDIA chips skyrocketed. With a combination of its chips, other hardware, and powerful software, NVIDIA has achieved about 80 percent market share. Image source: Reuters

NVIDIA, the world’s largest maker of chips for artificial intelligence and computer graphics, is set to face antitrust charges from France’s antitrust regulator, in what sources familiar with the matter say is the first enforcement action against NVIDIA in this context.

The French authorities’ “statement of opposition,” or charge sheet, follows recent raids on the graphics card sector last September, targeting NVIDIA. The raids stemmed from a broader investigation into cloud computing.

NVIDIA has seen a surge in demand for its chips following the launch of its generative AI app ChatGPT, which sparked heightened regulatory scrutiny on both sides of the Atlantic.

In a regulatory filing last year, NVIDIA revealed that regulators in the European Union, China and France had requested information about its graphics cards.

Sources suggest the European Commission is unlikely to extend its preliminary review at this point, given the ongoing investigation by the French regulator. The French watchdog recently issued a report that highlighted competition concerns in the generative AI sector, particularly the risk of abuse by chip suppliers.

The report specifically cited the sector’s reliance on NVIDIA’s CUDA programming software, which is the only system fully compatible with the GPUs needed for accelerated processing, and also noted NVIDIA’s recent investments in AI-focused cloud providers like CoreWeave.

Companies found to be in violation of French antitrust laws could be fined up to 10 percent of global annual turnover, although they can also offer concessions to avoid penalties. The U.S. Department of Justice is investigating NVIDIA as it assigns scrutiny to Big Tech under the Federal Trade Commission, according to a source familiar with the matter.

Last September, the French competition authority raided NVIDIA’s local offices on suspicion of anti-competitive practices. The French competition authority disclosed the raid at dawn, without providing details about the practices being investigated or identifying the targeted company, other than to say it operated in the “graphics card sector.” The raid was part of a broader investigation into cloud computing, focused on concerns that cloud computing companies may be using their access to computing power to squeeze out smaller competitors.

According to the Wall Street Journal, citing people with knowledge of the raid, the target of the operation was NVIDIA.

NVIDIA’s chips, originally designed for computer graphics applications, are now ideal for artificial intelligence computing, contributing to the company’s significant market share.

After ChatGPT was released late last year, demand for NVIDIA chips exploded. With a combination of its chips, other hardware, and powerful software, NVIDIA has achieved about 80 percent market share.

French authorities have recently taken a more aggressive stance against Big Tech. In September, for example, France suspended sales of Apple’s iPhone 12 and threatened to recall the product, citing radiation levels that exceeded limits, prompting Apple to issue a software update for the French market.

As the investigation into NVIDIA unfolds, the outcome could have significant implications for the chipmaker and the broader technology sector. The French antitrust regulator’s actions demonstrate a robust approach to ensuring fair competition in fast-moving technology sectors.

Find us on YouTube