Nvidia’s French Offices Undergo Regulatory Scrutiny Amid Cloud-Computing Competition Probe
In a recent development, France’s competition authority conducted a raid on local offices of Nvidia, the world’s leading provider of artificial intelligence and computer graphics chips. This move comes as the authority suspects anticompetitive practices within the graphics cards sector, marking a significant regulatory intervention for Nvidia since its ascension as a paramount AI chip supplier.
The Nature of the Raid
The French competition authority, in its disclosure on Wednesday, did not provide specific details regarding the suspected practices or the targeted company, except that it pertained to the “graphics cards sector.” However, reliable sources confirm that Nvidia was the primary focus. Typically, such raids entail thorough searches of a company’s premises, confiscation of physical and digital materials, and interviews with employees as part of an hours-long investigation.
The Regulatory Context
The raid follows a broader inquiry by the French competition authority into the cloud-computing sector. The authority expressed concerns that cloud-computing companies might leverage their computing power to exclude smaller competitors, prompting this investigation. Notable players in the cloud computing domain include Amazon.com, Microsoft, and Alphabet’s Google, all of whom rent out their considerable computing power through large data centers.
Nvidia’s Role in the AI Boom
Nvidia, recognized as the largest chip manufacturer globally for both AI and computer graphics, has witnessed a surge in demand for its chips. Originally designed for computer graphics, these chips have evolved into essential components driving the AI boom, especially with the advent of generative AI systems like OpenAI’s ChatGPT. Consequently, there has been a substantial increase in demand for Nvidia’s chips, resulting in a market shortage and a significant boost in sales.
Market Position and Expansion
Estimations by Citi analysts in June predicted that Nvidia would secure a market share of over 90% in AI chips, given its consistent introduction of newer, more powerful hardware versions. This projection came as the company crossed a significant milestone, achieving a valuation exceeding $1 trillion in June. Moreover, recent announcements from French companies, including Iliad Group and OVHcloud, regarding their collaboration with Nvidia to enhance their offerings of AI chips, further solidify Nvidia
