The European Commission has informally started to gather opinions on potential unfair practices related to the GPUs used for artificial intelligence (AI) applications, Bloomberg reports. The investigators are trying to determine if there is a need for subsequent action, which is a formal investigation. The report follows a police raid in Nvidia's office in Paris in connection with potential antitrust actions 'in the graphics card industry.'
Nvidia's GPUs have become indispensable for large-scale AI model training and inference. Bloomberg says that Nvidia's H100 processing units have enabled Nvidia to secure over 80% of the market, outstripping competitors like Intel and AMD. If these initial probes culminate in a formal EU antitrust investigation and Nvidia is found guilty, the company could face substantial penalties that could account for 10% of its global annual revenue. In Nvidia's case, that would be billions of dollars.
The EU's probe stems from concerns about anticompetitive behaviors in the burgeoning AI chip arena. Nvidia, which literally sells tons of compute GPUs for artificial intelligence workloads, is naturally at the heart of these formal and informal investigations. The European Commission is in the preliminary stages of collating information, trying to ascertain if there's enough ground to warrant a more in-depth, formal inquiry.
Meanwhile, France appears to be running a parallel probe. The French authorities are particularly keen on understanding Nvidia's predominant role, its pricing strategies, and the repercussions of the ongoing chip shortage on pricing. The alignment of the EU and French investigations underscores the gravity of the concerns surrounding Nvidia's market conduct.
Nvidia's ascendancy in the AI chip market has been meteoric yet predictable as it has invested billions of dollars in optimizing its CUDA software framework for AI applications well ahead of its rivals. This, along with the performance offered by Nvidia's A100 and H100 processing units, has not only cemented Nvidia's position in the AI landscape (especially in training sophisticated large language models) but also pushed them well ahead of tech giants like Intel and AMD.
This dominant market position, while a testament to Nvidia's innovation and ability to make bets on the right technologies, is now under the microscope due to potential antitrust implications.
