EU Probes Nvidia AI Chip Business Practices

The European Commission is approaching Nvidia competitors and customers for information on the company’s business practices, Reuters reported, in a move that may lead to a formal investigation into the dominant producer of artificial intelligence accelerator chips.

The Commission has sent out questionnaires asking specifically whether Nvidia bundles its products in a way that could give it an unfair advantage, the report said.

The questionnaires ask whether there is any commercial or technical tying of graphics processing units (GPUs).

The regulator wants to determine how Nvidia sells GPUs to various customers and whether the contracts require them to buy networking equipment along with the GPUs, Reuters’ sources said.

Anticompetitive practices

The Commission has also been sending separate questionnaires to companies in an inquiry related to Nvidia’s April purchase of start-up RunAI, which makes software for managing AI computing.

US regulators have also reportedly been probing the RunAI acquisition over concerns the deal would make it harder for customers to switch from Nvidia chips.

In July reports said Nvidia was likely to face formal charges from France’s competition regulator, 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.

As part of that inquiry, French authorities in September 2023 conducted dawn raids on a company suspected of “anticompetitive practices in the graphics cards sector”, understood to be Nvidia.

Market dominance

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.

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.

Reuters reported in July that the European Commission had begun a preliminary review of Nvidia under antitrust rules but had not yet launched a formal probe because of the French investigation.

Nvidia, which holds more than 80 percent of the AI chip market, said in a statement that it supports customer choice and competes on merit, and that it supports open industry standards.