France Prepares Formal Nvidia Antitrust Charges

Nvidia is set to face formal charges from France’s competition regulator, Reuters reported, which would make it the first authority to take action against the in-demand AI chip firm.

The statement of objections from France’s Autorité de la concurrence would follow dawn raids in September that the government said targeted a company suspected of “anticompetitive practices in the graphics cards sector”, understood to be Nvidia.

The raids were part of a broader inquiry into cloud computing, a sector critical to the booming generative AI market, whose services rely on cloud infrastructure for core tasks.

Nvidia’s dominance of the market for AI accelerator chips has come under scrutiny by regulators in multiple countries following the surge in corporate and investor interest in generative AI, which was spurred by the launch of OpenAI’s ChatGPT in late 2022.

Regulatory ‘interest’

Nvidia said in a regulatory filing in February that regulators in the US, the EU, the UK, China and France had asked for information on its graphics cards, widely used as AI accelerators.

“Our position in markets relating to AI has led to increased interest in our business from regulators worldwide,” the company said at the time.

France’s regulator has reportedly been interviewing market players on Nvidia’s role in the AI processor market, its pricing policies, the shortage of chips and its impact on prices, with the raid aimed at gaining more information on potential abuses of dominance.

The country can levy antitrust fines of up to 10 percent of a company’s global annual revenue.

The competition agency in 2020 levied a 1.24bn euro (£1bn) fine against Apple and two distributors.

On Friday it issued a report citing the risk of abuse of dominance by chip providers in the market for generative AI, noting that the specialised chips help to create high barriers to entry for the market.

Nvidia ‘dependence’

“Concern was… expressed regarding the sector’s dependence on Nvidia’s CUDA chip programming software,” the agency said, adding that Nvidia’s investments in AI-focused cloud service providers such as CoreWeave had also raised concerns.

The European Commission has begun a preliminary review of Nvidia under antitrust rules but has not yet launched a formal probe and is unlikely to do so because of the French investigation, Reuters reported, citing unnamed sources.

In the meantime the EU on Friday announced multiple probes into firms involved with generative AI, including Microsoft’s investments into OpenAI and a deal to put Google AI tools onto Samsung devices.

The US early last month announced similar antitrust investigations into Microsoft, OpenAI and Nvidia.