Nvidia could face antitrust charges in France as ‘risk of abuse by chip suppliers’ investigated by competition authority

Reuters suggests that Nvidia is under the watchful eye of the French competition authority, Autorité de la concurrence, and could face charges for alleged anti-competitive practices.

The Reuters report claims that the Autorité will file charges against the graphics card giant, citing people with direct knowledge of the matter. The exact details of the charges have not yet been disclosed, but they are likely to involve “allegedly anti-competitive practices.”

The Autorité has already had one run-in with Nvidia — a spontaneous raid on Nvidia’s offices last September. According to an Autorité press release, which does not directly mention Nvidia by name, the raid was carried out “at the headquarters of a company suspected of engaging in anti-competitive practices in the graphics card sector.”

A new report from the Autorité published last Friday highlights the authority’s concerns in another sector: generative AI. In it, Nvidia is mentioned in several points.

Nvidia is listed in the report as one of several “major digital companies,” including Amazon, Apple, Meta, and Nvidia. Microsoft and Google owner Alphabet are separately listed as the largest players. However, it is the only “IT component supplier” listed in the report.

The report goes on to outline various competitive risks in the sector. Only one mentions Nvidia by name, “the risk of abuse by chip suppliers.”

Here’s the section in its entirety:

“The Autorité found a range of potential risks, including price fixing, production restrictions, unfair contract terms and discriminatory behaviour. Concerns were also raised about the sector’s dependence on Nvidia’s CUDA chip programming software (the only one that is 100% compatible with GPUs, which have become essential for accelerated computing). Recent announcements about Nvidia’s investments in AI-focused cloud providers such as CoreWeave are also raising concerns.

“The graphics card sector, which was the target of an unannounced inspection in September 2023, is undergoing an in-depth review by the Autorité Investigative Services.”

Photos of Nvidia's Blackwell GPU from GTC.

Nvidia’s latest Blackwell GPU architecture. (Image Source: Nvidia)

Nvidia seems particularly concerned about the Autorité. It is, after all, a significant market leader in AI and graphics cards. It has a significant share of the gaming graphics card market – the latest Steam Hardware Survey gives us a rough idea of its dominance at 76% of the market.

This advantage is also evident in the AI industry. Nvidia is estimated to control between 70% and 95% of the AI hardware market. Even at the lowest estimates, Nvidia has control.

While Nvidia has competition in the AI hardware and gaming graphics business, Intel and AMD offer competition in both markets, and AI operations use specific accelerators like Google’s TPU, which is also mentioned in the report as a sufficient alternative to the green team’s hardware.

Likewise, the report notes that “alternatives to Nvidia’s CUDA software are starting to emerge,” which seems like a likely nod to AMD’s ROCm or Intel’s OneAPI — both of which claim to be more open, and therefore more cost-effective long-term alternatives to CUDA. CUDA remains the number one project, though.