Nvidia is set to face antitrust charges from the French government.
This action follows a raid by French authorities in September 2023 as part of an antitrust investigation into the cloud computing industry.
According to sources cited by Reuters, France is poised to lead global regulators in bringing antitrust charges against Nvidia. However, as the investigation continues, the European Commission is unlikely to expand its preliminary probe at this time.
Nvidia's legal trouble
The US Department of Justice is also reportedly investigating Nvidia for antitrust concerns, citing worries about its dominance in the AI chip market.
France's investigation into the cloud computing industry stemmed from concerns that large operators were monopolizing computing resources and disadvantaging smaller competitors. In late September 2023, the French government disclosed that it had conducted court-approved raids but did not specify the targets.
The Wall Street Journal later reported that Nvidia's offices in France were raided. Such raids typically involve seizing physical and digital materials and interviewing employees.
Alleged monopoly on the market
In June 2024, the French government released a report on competition in the generative AI market, highlighting risks associated with chip suppliers. The report expressed concerns about the industry's heavy reliance on Nvidia's CUDA software, the only system fully compatible with the GPUs necessary for accelerated computing applications.
Additionally, the report raised issues regarding Nvidia's investments in AI cloud service providers like CoreWeave. If found in violation of French antitrust laws, Nvidia could face fines of up to 10% of its global annual revenue, although penalties may be mitigated through settlements.
Rob Enderle, an analyst at Enderle Group, told Silicon Angle that France's focus on codified laws might advantage Nvidia in its defense, particularly compared to the US or UK, as French legislation has not yet been updated for AI or other advanced technologies.
Enderle suggested that proving price-fixing could be challenging for French authorities. "Price fixing involves competitors agreeing on prices secretly to undermine competition. Who would Nvidia be price fixing with?" he said.
Enderle also noted that the French investigation might be premature, given AI's nascent stage. "Nvidia's dominance comes from 20 years of investments that others didn't make, earned through hard work rather than antitrust behavior," he added.
