French Authorities Raided Nvidia's France Office

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The Autorité de la concurrence launches a surprise dawn raid against Nvidia.

Nvidia
Nvidia (Image credit: Nvidia)

The Autorité de la concurrence, the French Competition Authority, has carried out a surprise raid on Nvidia's French offices. The chipmaker is reportedly suspected of committing anticompetitive practices in the graphics cards sector.

The French Competition Authority didn't disclose the name of the company on which it conducted the raid. It only mentioned a company "in the graphics cards sector." The Wall Street Journal (WSJ) reported that sources familiar with the matter claimed that it was Nvidia. Having obtained authorization from a judge, the French antitrust agency went forward with the raid.

"Such dawn raids do not pre-suppose the existence of a breach of the law which could be imputed to the company involved in the alleged practices, which only a full investigation into the merits of the case could establish, if appropriate," wrote the French Competition Authority in the report.

According to WSJ, dawn raids consist of the authorities showing up early in the morning to confiscate a company's physical and digital materials. They also interview the personnel that come into the office. The French Competition Authority stated that the raid was part of a more extensive operation launched in June to investigate the competition conditions in the cloud computing market. 

Nvidia has significantly profited from the AI boom, made possible by the emergence of ChatGPT. As a result, Nvidia's high-end AI chips, such as the H100 (Hopper), are selling like hotcakes. Nvidia's latest financial results show that the company pulled in $13.5 billion in revenue, a whopping 101% improvement from last year. It isn't a coincidence that Nvidia has become the world's largest fabless chip designer.

WSJ reported that Nvidia declined to comment.

Zhiye Liu
Zhiye Liu
News Editor and Memory Reviewer

Zhiye Liu is a news editor and memory reviewer at Tom’s Hardware. Although he loves everything that’s hardware, he has a soft spot for CPUs, GPUs, and RAM.

35 Comments Comment from the forums
  • watzupken
    Anti competitive practices are not uncommon in a monopoly. In fact I will be shocked if they are clean. With regards to AI, I would think of it as first mover advantage for Nvidia. There is little need for anti competitive practices now given that competitors are just responding. I guess the raid may be due to complaints in the sector on unfair pricing due to the exorbitant price Nvidia is charging.
    Reply
  • brandonjclark
    EU: (watches NVidia stock rise)

    NVidia: (Please don't look over here! Please)

    EU: (notices sizable lack of tax "revenue"). Hey, NVidia! Sure is a big amount of money you have over there!

    France: ....

    EU: .....(looks at France)

    France: Fine!
    Reply
  • bit_user
    brandonjclark said:
    EU: (notices sizable lack of tax "revenue"). Hey, NVidia! Sure is a big amount of money you have over there!
    If it were about taxes, then that's what they'd have gone after. An anticompetitive practices case isn't the easiest thing to prove in court, so it wouldn't make sense to do that in lieu of pursuing a tax case.

    Although I don't know the first thing about French or EU law, I'm going to go out on a limb and guess that they needed to show probable cause to get the warrant to do the pre-dawn raid. So, if there wasn't grounds for an anticomptetive practices case, then I don't think they'd be pursuing one.
    Reply
  • ezst036
    Meh.

    These are just desperate greedy governments looking for an easy cash infusion. Realistically the French government is being way more anti-competitive than Nvidia is.

    Especially in France, let's explore that for a second. They had those Yellow Vest protests going on not all that long ago and pension reform might bring it all back. They can't exactly raise any more taxes without it resulting in more people in the streets. So the next step, scapegoating!

    If I were Nvidia I would close some offices in France and let those people go unemployed to cover these unnecessary costs being incurred by the French government.
    Reply
  • bit_user
    ezst036 said:
    They can't exactly raise any more taxes without it resulting in more people in the streets.
    What you're saying is the opposite of what they did. They've been on a path of trying to make the country more business-friendly, and it's cost them some goodwill with the public. To walk back on that now, would be utterly self-defeating.

    ezst036 said:
    If I were Nvidia I would close some offices in France and let those people go unemployed to cover these unnecessary costs being incurred by the French government.
    That won't protect you from being prosecuted for any crimes you've already committed.

    As far as minimizing future exposure, they presumably do a fair amount of business in France. Completely pulling out would be very costly to their bottom line. Furthermore, one of the most valuable things Nvidia has is its software ecosystem. If you take a chunk of the market and just deliver them to your competitors, they will help flesh out the software ecosystem of your competitors, which will also hurt you outside of France.
    Reply
  • TerryLaze
    Standard which hunt...
    This article links to the actual government page on this topic.
    The only reason they do the raids is because the market is dominated by too few players and that COULD hinder competition, so we better raid everybody that had any business with these companies just to make sure...

    https://www.autoritedelaconcurrence.fr/en/press-release/cloud-computing-autorite-de-la-concurrence-issues-its-market-study-competition-cloud
    The sector is dominated by three hyperscalers: Amazon Web Services (AWS), Google Cloud and Microsoft Azure, and represent 80% of the spending growth in public cloud infrastructures and applications in France in 2021. Amazon and Microsoft have captured 46 % and 17 % respectively of revenues from IaaS and PaaS services in 2021. Given their financial capacities and their digital ecosystems, these hyperscalers are in a position to hinder competition development.
    Reply
  • TheOtherOne
    Nothing to do with some behind the scenes shenanigans that may or may not produce things like this? 🤔🤫

    https://www.tomshardware.com/news/cyberpunk-2077-31-percent-faster-on-amd-in-linux-vs-windows-11
    Reply
  • Kamen Rider Blade
    Basically, the French Government looks at nVIDIA's giant pile of $$$ and declares that nVIDIA is "Guilty Until Proven Innocent".

    Time to go on a fishing expedition!

    Go RAID those nVIDIA Offices!
    Reply
  • purpleduggy
    ezst036 said:
    Meh.

    These are just desperate greedy governments looking for an easy cash infusion. Realistically the French government is being way more anti-competitive than Nvidia is.

    Especially in France, let's explore that for a second. They had those Yellow Vest protests going on not all that long ago and pension reform might bring it all back. They can't exactly raise any more taxes without it resulting in more people in the streets. So the next step, scapegoating!

    If I were Nvidia I would close some offices in France and let those people go unemployed to cover these unnecessary costs being incurred by the French government.
    im gonna say no. its more to do with French public sector dependency on one single AI hardware company which happens through monopolization. nvidia impacts national security with their monopoly, so they need to be broken up and competitors boosted to create a situation where there is no single point of failure. if a competing nation infiltrated nvidia in a state of complete reliance on their hardware, it would be utter defeat. i expect the US and other countries will do the same to Nvidia soon. its like having fighter jets, but there is only one company making them. this is a very bad idea. single points of failure are massive risks. money has nothing to do with it. this is the real reason why the nvidia arm deal did not go through. there needs to be healthy competition from multiple companies if the hardware runs national security infrastructure. even just AMD is not enough there should be 5 other companies competing.
    Reply
  • aberkae
    First Nvidia's ARM deal gets blocked, ARM's ipo stock takes 14% hit and now this 🤔.
    Reply