Nvidia Faces Charges Under French Competition Law

The tech giant Nvidia is currently facing a wave of antitrust scrutiny in multiple countries, including the European Union, the United States, and China. The investigation began following a raid on Nvidia's premises in Paris by the French antitrust regulator, the Autorité de la concurrence, in September 2023. While Nvidia was not initially named by the regulator, the company later confirmed the investigation in its regulatory filing for the third quarter of fiscal 2024.

In a recent report issued by the French competition authority, concerns were raised about potential market abuse by chip providers in the generative AI sector. The report specifically highlighted the market's reliance on Nvidia's CUDA chip programming software, indicating a potential anti-competitive behavior. Additionally, the report expressed worries about Nvidia's investments in AI-focused cloud service providers like CoreWeave, further intensifying the scrutiny on the company.

Simultaneously, Nvidia, along with tech giants Microsoft and OpenAI, is under investigation in the United States. The Department of Justice and the Federal Trade Commission are jointly looking into the activities of these companies, focusing on potential antitrust violations within the tech industry. The investigations in the US are running parallel to the inquiries in the EU and China, creating a challenging situation for Nvidia.

Despite the mounting regulatory pressure, Nvidia has continued to see significant growth in its sales, quadrupling its revenue year-on-year. This impressive financial performance has further drawn attention to the company's dominant position in the AI chip market and raised concerns about potential monopolistic practices. The ongoing investigations are likely to have a substantial impact on Nvidia's future business operations and market position.

As Nvidia navigates the complex landscape of antitrust scrutiny across multiple jurisdictions, its competitors are also making strategic moves. Intel, a key rival in the AI chip sector, has unveiled its Gaudi 3 AI chip, directly targeting Nvidia's market dominance. The intensifying competition and regulatory challenges are reshaping the dynamics of the tech industry, setting the stage for a potential shift in power within the AI chip market.