Nvidia could soon find itself in the crosshairs of antitrust authorities for the first time

Analysis by Bloomberg, The Futurum Group and Project Syndicate.

The news

Nvidia could soon face antitrust charges in France, Reuters reported. It would be the first time the regulator has brought such charges against the U.S. chipmaker, which is one of the world’s most valuable public companies.

While the exact nature of the potential allegations is unclear, they could relate to the company’s highly coveted graphics cards — last year, French antitrust inspectors raided Nvidia’s Paris offices, citing concerns about the cards. Nvidia is estimated to control about 80% of the AI ​​chip market.

SIGNALS

Nvidia’s success comes with regulatory scrutiny

The bigger Nvidia gets, the more regulators are paying attention to the company. The chipmaker is worth about $3 trillion, and its dominance of the global semiconductor market helped it briefly become the world’s most valuable company in June. Success has brought scrutiny: The U.K. and other European countries are believed to be investigating Nvidia’s business practices, as is the U.S. The Federal Trade Commission and the Justice Department are looking into antitrust investigations of the chipmaker, alongside fellow AI giants Microsoft and OpenAI, as the Biden administration makes regulating Big Tech a priority.

Aggressive EU regulation of Big Tech ‘slows down innovation’

A potential antitrust investigation in France is unlikely to deter Nvidia’s meteoric rise — and such investigations are slowing European innovation, argued Daniel Newman, CEO of research firm The Futurum Group. The EU’s aggressive regulation of Big Tech has led to large fines for U.S. companies like Google, Apple and Microsoft without significantly changing their behavior but making life harder for their European competitors. “Politics and corporate taxation have long been two key areas that have slowed the most innovative technologies in Europe, and have arguably set the region back significantly by creating a dependency on U.S. technology,” Newman said.

AI Likely to Fuel Big Tech’s Abuses of Competition

The abuses of competition that are already rampant in Big Tech will only intensify as AI grows, Bloomberg reports, Germany’s top antitrust official said. Andreas Mundt, head of Germany’s Federal Cartel Office, singled out Nvidia at an annual news conference, describing AI as a “first-class firebrand” of anticompetitive behavior that “will only make all the problems worse.” That’s because Big Tech companies have access to resources to build better AI tools, argued a professor of public policy at Project Syndicate, a media nonprofit, making it more likely they will solidify their dominance.