French competition authorities plan to sue the U.S. semiconductor company Nvidia for antitrust law violations, major foreign media reported on the 1st (local time).
The authorities revealed that in September last year, they conducted a raid on the local offices of a company suspected of anti-competitive practices in the graphics card sector without disclosing the company's name. According to sources, Nvidia was the target. The authorities also investigated Nvidia's key role in artificial intelligence (AI) processors, pricing policies, chip shortages, and their impact on prices.
If sanctioned for antitrust violations in France, Nvidia could face fines of up to 10% of its global annual revenue. Foreign media explained that if the French competition authorities finalize sanctions against Nvidia, it would be the first time in the world that Nvidia faces antitrust penalties.
Nvidia is considered the biggest beneficiary of the generative AI boom, including ChatGPT. Nvidia's graphics processing unit (GPU) chips are well-suited for processing the massive amounts of data required to develop AI models, holding over 80% of the global AI chip market.
In November last year, Bruno Le Maire, France's Minister of Finance, argued that Nvidia's market dominance exacerbates inequalities between countries and hinders fair competition.
In a report on generative AI competition issued on the 28th of last month, French authorities mentioned the risk of Nvidia's monopoly. Nvidia's CUDA chip programming software is the only system 100% compatible with GPUs, leading to excessive dependence. They also expressed concerns about Nvidia's investments in AI-focused cloud service providers such as CoreWeave.
Last year, Nvidia disclosed that regulatory agencies in the United States, European Union (EU), China, and the United Kingdom, as well as France, requested information related to graphics cards. At the time, Nvidia stated, "Due to our position in the AI-related market, regulatory agencies worldwide have taken an interest in our business." This raises the possibility that Nvidia may face sanctions in other countries starting with France.
According to sources, the U.S. Department of Justice is also investigating Nvidia, and the EU Commission is reportedly reviewing the possibility of Nvidia violating antitrust regulations.
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