French Antitrust Regulator Investigates Nvidia’s Offices for Suspected Anticompetitive Practices in Graphics Cards Sector
French antitrust regulator, the Autorité de la concurrence, has raided Nvidia Corp.’s local offices in response to suspicions of anticompetitive practices in the graphics cards sector. The raid, which took place early morning, was confirmed by the regulator, but the company under investigation was not initially disclosed. However, the Wall Street Journal has since reported that Nvidia was indeed the focus of the raid.
Typically, antitrust raids carried out by the Autorité de la concurrence occur in the early morning hours. Officials from the agency visit the offices of the company being scrutinized, conducting searches, interviewing employees, and sometimes seizing data that may be relevant to antitrust allegations.
In this case, the Autorité de la concurrence has specified that the company in question is suspected of implementing anticompetitive practices in the graphics cards sector, with a particular focus on the cloud. Nvidia, as the leading supplier of graphics processing units to cloud data centers, may face increased scrutiny due to its strong market position.
Nvidia’s data center revenues have experienced significant growth in recent quarters, particularly driven by the growing interest in generative artificial intelligence. In the three months ending July 30, the company’s data center revenues surged 171% year-over-year, reaching $10.32 billion. Citigroup Inc. analysts estimate that Nvidia will continue to dominate the AI chip market, projecting a market share of over 90% in the future.
This dominant market position may be a driving factor behind the antitrust scrutiny from French regulators. The raid suggests that Nvidia could potentially face a formal antitrust probe if it is not already under investigation. The Autorité de la concurrence clarified that the raid was approved by a judge.
The exact nature of the anticompetitive practices that Nvidia is suspected of employing remains unclear. While the company faces competition from numerous other chipmakers in the data center AI market, its two biggest rivals are Intel Corp. and Advanced Micro Devices Inc. Both companies have been actively working on developing alternative AI chips to challenge Nvidia’s market position.
Intel’s acquisition of Habana Labs Ltd., an AI chip developer, for $2 billion in 2019, allowed the company to offer an alternative to Nvidia’s data center graphics card with its Gaudi2 processor. Similarly, AMD has been developing the Instinct MI300, an AI accelerator optimized for data center use, to compete with Nvidia’s offerings.
In addition to its rivals, Nvidia also faces competition from various startups, including SambaNova Systems Inc. and Cerebras Systems Inc., which offer data center processors specifically optimized for machine learning workloads.
As the investigation into Nvidia’s alleged anticompetitive practices continues, it remains to be seen how the company will respond and what implications this may have for the graphics cards sector and the broader AI chip market.
References:
– [French antitrust regulator reportedly raids Nvidia’s local offices](https://www.datacenterknowledge.com/cloud/france-antitrust-regulator-reportedly-raids-nvidia-s-local-offices)
– [French Antitrust Regulator Raids Nvidia’s Offices over Suspected Anticompetitive Practices in Graphics Cards Sector](https://www.wsj.com/articles/french-competition-regulator-raids-nvidia-offices-11634532154)
