Nvidia to Face Antitrust Charges in France

Nvidia is expected to face charges from the French antitrust regulator for alleged anti-competitive practices, according to individuals with direct knowledge of the situation. This marks a significant development, as it represents the first instance of an enforcement action against the prominent computer chip manufacturer.

The French statement of objections or charge sheet is expected to follow the dawn raids conducted in the graphics cards industry in September of last year. Sources indicate that these raids specifically targeted Nvidia. The raids were part of a wider investigation into the cloud computing sector.

The preemine”t global manufacturer of microprocessors utilized in both artificial intelligence and computer graphics has experienced a surge in demand for its products following the launch of the generative AI application ChatGPT. This development has attracted regulatory scrutiny from authorities on both sides of the Atlantic.

The French authority, whichh selectively publishes its statements of objections to companies, and Nvidia declined to comment. In a regulatory filing last year, the company disclosed that regulators in the European Union, China, and France had requested information regarding its graphic cards.

The European Commission Is unlikely to broaden its preliminary investigation at this time, as the French authority is currently conducting its own review of Nvidia, according to multiple individuals with direct knowledge of the matter.

In a report published last Friday on competition in generative AI, the French watchdog highlighted the potential for misuse by chip suppliers.

It expressed apprehensions about the industry’s reliance on Nvidia’s CUDA chip programming software, which is the sole platform fully compatible with the GPUs that have become indispensable for accelerated computing.

Additionally, there are concerns regarding Nvidia’s recent investments in cloud service providers focused on AI, such as CoreWeave.

Companies may face substantial financial penalties, potentially amounting to 10% of their global annual revenue, for violating French antitrust regulations. However, they have the opportunity to mitigate or avoid these penalties by offering concessions.

The United States Department of Justice is assuming the primary responsibility for conducting an investigation into Nvidia, as it divides the scrutiny of major technology companies with the Federal Trade Commission, as disclosed by a well-informed source to Reuters.

July 02, 2024