EU competition chief flags Nvidia AI chip supply problem, regulatory response unclear

EU competition chief Margrethe Vestager has highlighted a significant bottleneck in the supply of AI chips from Nvidia Corp., but said regulatory intervention has yet to be decided. During a recent trip to Singapore, Vestager spoke to Bloomberg about the ongoing situation, noting that while investigations are underway, they remain preliminary and do not currently meet the criteria for regulatory action.

“We’ve asked them questions, but it’s really preliminary,” Vestager told Bloomberg. She added that the Nvidia situation “does not” so far “meet the criteria for regulatory action” by the EU.

Nvidia, a key player in the AI ​​sector, has attracted significant regulatory attention after becoming a major beneficiary of the surge in AI spending. The company’s graphics processing units (GPUs) are highly coveted by data center operators for their ability to process the massive amounts of data required to develop AI models. Nvidia’s H100 processing units, in particular, have become one of the most coveted products in the tech industry, with cloud service providers vying for access.

Related: Nvidia Under Global Regulatory Scrutiny Amid Antitrust Investigations

Estimates suggest Nvidia has secured a market share of more than 80%, outpacing rivals such as Intel Corp. and Advanced Micro Devices Inc. This dominant position has raised concerns from regulators about the potential impact on competition and innovation in the AI ​​chip market.

Vestager acknowledged that Nvidia’s dominance poses a challenge, but suggested that secondary markets could stimulate innovation and ensure fair competition in the EU. However, she also warned that companies with significant market power could face restrictions on their behavior to maintain fair competition.

“When you have such a dominant position in the market, there are things you can’t do that a small company can do,” Vestager said. “But other than that, as long as you run your business and respect that, it’s fine.”

As the situation develops, the EU’s approach to Nvidia’s market position will be closely watched by industry stakeholders and competitors.

Source: Bloomberg