EU launches early investigation into Nvidia AI chips

A few days ago, the French Competition Authority executed a surprise raid on NVIDIA’s offices in France, amidst allegations of anti-competitive practices. The decisive maneuver by the Authority was conducted following a more expansive probe into the cloud computing industry, fueled by concerns that cloud computing behemoths might exploit their computational prowess to ostracize smaller adversaries.

According to Bloomberg, the European Commission has informally commenced the collection of perspectives regarding potential inequities tied to the use of GPUs in artificial intelligence (AI) applications. Investigators are ascertaining the necessity of subsequent interventions. Should preliminary findings necessitate a formal antitrust inquisition and NVIDIA be adjudicated guilty, they may be confronted with a staggering fine, potentially tantamount to 10% of their global annual revenue—amounting to several billions of U.S. dollars.

The EU’s inquiry emanates from trepidations surrounding anti-competitive behavior in the burgeoning realm of AI chip technology. Presently, with NVIDIA’s data center GPUs dominating over 80% of the market and a prodigious volume of GPUs sold for AI workloads, they naturally emerge as the epicenter of this scrutiny. The European Commission is in the embryonic stages of data collation, endeavoring to discern whether there’s sufficient rationale for a more profound and formal inquiry—a process that will inevitably span some duration.

Mirroring France’s pursuits, the EU’s inquiry seeks insights into NVIDIA’s commanding stature, pricing stratagems, and the implications of AI chip scarcity on pricing structures. This underscores the grave apprehensions surrounding NVIDIA’s market conduct. NVIDIA’s multibillion-dollar investment in optimizing its CUDA software framework for AI applications, placing it leagues ahead of competitors, has solidified its vanguard position. Consequently, its every move is now under an inexorable microscope.