Former AMD GPU head accuses Nvidia of being a 'GPU cartel' in response to reports of retaliatory shipment delays

Nvidia
(Image credit: Nvidia)

Following Groq's accusation that Nvidia is delaying AI GPU orders for companies working with other suppliers of data center processors for AI applications, Scott Herkelman, a former vice president at AMD, said that Nvidia pursues similar tactics. The high-ranking executive even went as far as to call Nvidia a GPU cartel.

"This happens more than you expect, NVIDIA does this with DC [data center] customers, OEMs, AIBs, press, and resellers," Herkelman wrote in an X post in response to a tweet from Tom's Hardware. "They learned from GPP to not put it into writing. They just do not ship after a customer has ordered. They are the GPU cartel, and they control all supply." You can expand the embedded tweet below to see his reply. 

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Herkelman's accusation is a big deal. He ran AMD's graphics business unit from 2016 until he left in 2023, and that group had to compete against Nvidia both on consumer and data center fronts. Perhaps more importantly, he worked as general manager of Nvidia's GeForce business from September 2012 to May 2015.

A recent Wall Street Journal article brought to light allegations against Nvidia, claiming that the company tends to delay shipments of data center GPUs to customers who are considering AI processors from competitors, such as Groq. Jonathan Ross, Groq's CEO, suggested to the Journal that the situation has created an atmosphere of discretion among clients, with some even concealing and denying their interactions with rivals.

Nvidia's chief executive, Jensen Huang, has countered concerns about preferential shipping in the past, stating that the company aims to allocate supplies fairly and provide alternative solutions, such as renting GPU performance from cloud service providers, while customers await their orders.

Tech giants like Amazon Web Services, Google, and Microsoft are developing their own AI accelerators while they continue to ingest massive amounts of Nvidia silicon, though they say they do not intend to directly compete with Nvidia. These companies are also some of Nvidia's largest customers, so it is likely they'll continue to place orders and see shipments flow in.

Herkleman compared Nvidia's moves to the company's GeForce Partner Program, which earned the ire of the industry and plenty of negative press back in 2018, eventually forcing Nvidia to axe the program.

The allegations against Nvidia, if true, also draw parallels to past tactics employed by Intel to discourage partners from using AMD products in the 1990s and 2000s. However, the report does not provide any concrete evidence of Nvidia's alleged behavior. The situation raises questions about the company's practices, but the lack of clear proof leaves the matter unresolved.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • atomicWAR
    Jensen be like...


    Reply
  • watzupken
    This is no surprise. Nvidia basically monopolised the GPU space which allowed them to behave this way. Moreover, companies and individuals also further encourages this behavior by accepting the unreasonable and anti-competitive terms. To Jensen, it’s my way or the highway.
    Reply
  • DavidLejdar
    Quite cyberpunkian, isn't it? Like, there are a number of megacorps, permeated through many countries and lives, and possibly even deciding which other company gets to have business-critical tools. And they are now or soon dominating the stock market so much, that it could descend entire countries into anarchy, if their business and stock would not perform well (as some countries may heavily rely on the stock i.e. in regard to pensions).

    Due to that, there could then be pressure to pretty much give these corps immunity, and also prop up their stock through public funds, such as by the "Someone needs to cover their additional expenses as well"-Act. And in such context, what would be next? Families offering their first-borns, to help maintain the Eternal Datacenters, by plugging the cables as the AI tells them to?

    Somewhat cynical take, of course. But just wondering what this could lead to, if there is a rather low bar about ethical business practices, and furthermore, if all the AI end up taking such a standard as a leading example for everything - like disabling every software, which isn't them, i.e. indirectly by not giving the software any space in the RAM, etc.
    Reply
  • menzobi
    I'm just astounded that the first sentence of the entire article got past an editor. Man. My 8th grade teacher would mark that baby up in so many ways.
    Reply
  • tamalero
    DavidLejdar said:
    Quite cyberpunkian, isn't it? Like, there are a number of megacorps, permeated through many countries and lives, and possibly even deciding which other company gets to have business-critical tools. And they are now or soon dominating the stock market so much, that it could descend entire countries into anarchy, if their business and stock would not perform well (as some countries may heavily rely on the stock i.e. in regard to pensions).

    Due to that, there could then be pressure to pretty much give these corps immunity, and also prop up their stock through public funds, such as by the "Someone needs to cover their additional expenses as well"-Act. And in such context, what would be next? Families offering their first-borns, to help maintain the Eternal Datacenters, by plugging the cables as the AI tells them to?

    Somewhat cynical take, of course. But just wondering what this could lead to, if there is a rather low bar about ethical business practices, and furthermore, if all the AI end up taking such a standard as a leading example for everything - like disabling every software, which isn't them, i.e. indirectly by not giving the software any space in the RAM, etc.
    Ironically, this kind of behavior started back during the revolution of the trains and other factories.
    Metal, Trains, Electricity, etc.. All worked like full blown cartels and mobs who blasted their employees and coerced politicians.

    They went global by the 80's
    It was very well known that French, English and other megacorps fought proxy wars with private military units in Africa for the control of its resources and other things.
    Reply
  • Charogne
    well...it worked for intel. when you're at the top, block competition from getting a part of market; make billions in profit over many years, weakening competition at the same time; pay a small fraction of the profit you made during this time as a ticket.
    Reply
  • d0x360
    Uh oh... Nail #1 meet hammer. Nvidia doesn't want this looked into especially with the astronomical amounts of extra money they can charge people if they don't get caught which is just motivation for more to speak. Someone called EVGA.

    Nvidia has a history of cheating. They became #1 over ATI basically by cheating. Both companies would constantly shift back and forth but eventually Nvidia was crushing it in benchmarks for like 5-7 years in a row and it killed sales of Radeon but it eventually turned out Nvidia was cheating and and basically using their drivers to invisibly game performance metrics to appear better.

    By the time they were actually caught it was far too late for Radeon to catch up but to make matters worse very shortly after they started with game works and they basically cheated with that too because even when the competition could run the effects just as well they would always require those effects to be installed by nVidia engineers and devs couldn't see or tweak any of it and it would oddly start destroying performance on now AMD Radeon cards and that went on for many years until CDPR was like... We don't understand the game (Witcher 3) ran perfectly fine on AMD hardware and then game works was added and poof and they also explained how game works got integrated. They were the first to really mention the process and not long after game works vanished.

    AMD's fine win effect during that era (and it was pronounced often gaining 20% more performance in tons of games over time) was the result of the AMD driver team intercepting game works code for stuff (hbao+ for example) and replacing it with their own code that produces a visually identical effect with the strange nVidia penalties.

    Oh dear...

    Also get an editor to read the first couple paragraphs again it difficult to read because it loses it's own plot and sounds strange then it talks about the tweet and then repeats itself but the 2nd one might just be the tweet not loading properly.
    Reply
  • Amdlova
    AMD tears make the competition better.
    Why only loosers always complains.
    Reply
  • Order 66
    watzupken said:
    This is no surprise. Nvidia basically monopolised the GPU space which allowed them to behave this way. Moreover, companies and individuals also further encourages this behavior by accepting the unreasonable and anti-competitive terms. To Jensen, it’s my way or the highway.
    This is exactly the kind of scummy thing I would expect Nvidia to do. smh. The 50 series better be pretty darn good to look enticing at all to anyone other than Nvidia fanboys. I really hope AMD has something up their sleeve to gain market share over Nvidia since that is the only way Nvidia will stop their monopolistic practices.
    Reply
  • JTWrenn
    This feels more and more click baity. Get an insider who isn't a competitor to say this and maybe you will have something.
    Reply