Nvidia’s AI chips are ‘huge bottleneck’ but that doesn’t mean regulatory action is needed, says EU

European Union competition chief Margrethe Vestager warned of a “huge bottleneck” in the supply of AI chips from Nvidia Corp., but said regulators were still considering what, if anything, to do about it.

“We’ve asked them questions, but it’s really preliminary,” she told Bloomberg during a trip to Singapore. “This would not” yet “check the box for regulatory action.”

Nvidia has attracted regulatory scrutiny since it became the biggest beneficiary of the boom in AI spending. Its graphics processing units — or GPUs — are prized by data center operators for their ability to process the vast amounts of information required to develop AI models.

The chips have become one of the hottest commodities in the tech world, with cloud providers competing to get their hands on them. Nvidia’s coveted H100 processing units have helped it gain a market share of more than 80%, according to estimates, overtaking rivals Intel Corp. and Advanced Micro Devices Inc.

Despite supply constraints, Vestager said secondary markets for AI chip supplies can help spur innovation and fair competition.

However, she added that companies with a dominant position may face certain restrictions on their behaviour in the future.

“When you have that kind of market dominance, there are things you can’t do that a small company can do,” she said. “But other than that, as long as you run your business and respect that, it’s fine.”