Nvidia’s dominance in providing chips to power artificial-intelligence technology was bound to attract the notice of regulators. Now the company looks set to face the first antitrust challenge of its AI era but it should only be a small obstacle.
is about to be charged by the French antitrust regulator for allegedly anticompetitive practices, Reuters reported, citing people with knowledge of the matter.
Nvidia declined to comment on the report and the regulator didn’t immediately respond to a request for comment. Nvidia stock was down 1.2% in premarket trading on Tuesday.
It’s hard to know exactly how serious the charges will be, but Nvidia generally has a strong case that its success has been built on providing a superior product rather than strangling competition. There are plenty of competitors making alternative AI chips, from large companies such as
to start-ups, and the company’s own customers such as
and
None of them has managed to displace Nvidia’s dominant market share so far.
In a report published last week, the French regulator cited the risk of abuse by chip providers, noting potential price fixing, production restrictions, unfair contractual conditions and discriminatory behavior. None of those risks was cited as directly relating to Nvidia but the regulator did identify the company in the report.
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“Concern was also expressed regarding the sector’s dependence on Nvidia’s CUDA chip programming software…Recent announcements of Nvidia’s investments in AI-focused cloud service providers such as CoreWeave are also raising concerns,” the regulator said.
The point about the AI industry’s reliance on Nvidia’s CUDA software is only a natural result of the company’s hardware success. A consortium of technology companies, including
Qualcomm
,
Alphabet
’s
Google, and
Intel
,
is already planning to develop software and tools that can power multiple types of AI chips in the hope of lessening that reliance.
Nvidia has invested in CoreWeave, which provides large scale graphics-processing unit capacity via the cloud to start-ups and larger enterprises. The company has a close partnership with Nvidia and was one of the first vendors to bring its H100 GPUs to market.
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However, CoreWeave has plenty of other investors and Nvidia can say that its backing helps provide alternatives in the cloud-computing market and access to AI chips, rather than forcing companies to rely on giants such as Amazon and Microsoft.
Write to Adam Clark at adam.clark@barrons.com
