Why Nvidia Could Soon Face Antitrust Charges in France

Last month, Nvidia briefly became the world’s most valuable company, reaching a market capitalization of $3.3 trillion. Behind the company’s meteoric rise to the top is its market dominance in advanced AI chips.

Once known mainly for its powerful graphics processing units (GPUs) designed for gaming, Nvidia has used its technological potential to enter the artificial intelligence race.

Its GPUs are excellent for parallel processing, simulations, and machine learning tasks, making them suitable for training and deploying AI models like ChatGPT.

Another major advantage for Nvidia is its CUDA chip programming platform and software ecosystem, which has made the company a leading provider of GPU computing solutions, especially for accelerating machine learning workloads.

Analysts estimate that the tech giant accounts for 70%-85% of the AI ​​chip market share. This market dominance has put Nvidia in the EU’s crosshairs.

Raising eyebrows in the EU

In a report last week, France’s antitrust regulator, the Authority de la Concurrence, raised concerns about potential anti-competitive practices in the generative AI sector, highlighting the risk of chip suppliers abusing their market power.

Authorities have raised particular concerns about the industry’s reliance on Nvidia’s CUDA software, as well as the company’s recent investments in AI-focused cloud providers such as CoreWeave.

The French regulator also cited a number of risks in the upstream chip value chain, where it places Nvidia. These include denying or restricting developers’ access to chips, which could lead to “delays or the introduction of less ambitious models, thereby undermining effective competition in the market,” the body said.

The regulator plans to formally charge Nvidia with alleged anti-competitive behavior, according to people familiar with the matter who spoke to Reuters. It would be the first time a national enforcement body has taken legal action against a technology company.

The revelation follows a September raid on Nvidia’s offices in France, which was part of the regulator’s ongoing investigation into competition in the cloud computing market.

Nvidia has also reportedly been the subject of an informal EU investigation into suspicions of monopolistic practices in the AI ​​chip sector.

As the EU pushes for digital sovereignty and increased domestic chip production, it is not unlikely that Nvidia’s dominant market position will attract the (official) attention of the European Commission, which is already taking decisive action against big tech.

The concentration of advanced AI chip production in the hands of a US tech giant could make it harder for the bloc to achieve its ambitions, posing potential risks such as production restrictions, unfair contract terms and even price manipulation.

The French regulator’s next move could trigger a domino effect on national and EU-wide reactions.