According to insiders, France's antitrust regulator plans to accuse Nvidia of anti-competitive behavior, becoming the first country to take antitrust action against the company.
In September last year, French law enforcement agencies conducted a surprise inspection of the graphics card industry to obtain more information about potential abuse of market dominance. At that time, they did not confirm that the company was Nvidia, but Nvidia later admitted that France and other agencies were investigating its business practices.
Insiders said that last year's surprise inspection was the result of a broad investigation into cloud computing. As the world's largest manufacturer of artificial intelligence and computer graphics cards, Nvidia's chip demand surged after the release of the generative artificial intelligence application ChatGPT, triggering close attention from anti-monopoly agencies in Europe and America.
Currently, French regulators and Nvidia have refused to comment on this. In a regulatory filing in February of this year, Nvidia said that regulatory agencies in the EU and France had asked the company for information about its graphics card products. "Our position in the AI-related market has attracted more attention from regulators around the world to our business," Nvidia said at the time.
It is reported that the French antitrust agency has been investigating market participants to understand Nvidia's key role in AI processors, pricing policies, chip shortages, and their impact on prices. A report on generative artificial intelligence competition released by the French regulatory agency last Friday mentioned the risk of abuse of power by chip suppliers.
The report expressed concern about the industry's reliance on Nvidia's CUDA chip programming software because it is the only system that is fully compatible with GPUs required for accelerated computing. In addition, the report also mentioned concern about Nvidia's recent investment in CoreWeave, a cloud computing service provider focused on AI.
Companies that violate French antitrust rules face fines of up to 10% of their global annual revenue, but they can also offer concessions to avoid penalties. The agency's largest fine since 2011 was €1.24 billion ($1.33 billion) in 2020. Of this amount, €1.1 billion was a fine against Apple, and the rest was a fine against two distributors.
In Brussels, the European Commission has been informally gathering opinions to determine whether Nvidia has also violated its antitrust rules, but has not yet launched a formal investigation into anti-competitive behavior.
Last November, French Finance Minister Bruno Le Maire said that Nvidia's dominant position is exacerbating inequality between countries and suppressing fair competition. He pointed out that 92% of GPUs come from Nvidia. "If you want fair competition, you need a lot of private companies, not the possibility of selling all equipment controlled by one company," Le Maire said.
Meanwhile, a source familiar with the matter revealed that the US Department of Justice is leading an investigation into Nvidia, with the Federal Trade Commission (FTC) reviewing large technology companies.
Regarding France's antitrust action, Nvidia's stock price fell more than 3.8% in early trading on Monday, but later turned up and fell slightly by 0.32% at noon, at $123.15. Nvidia's stock price has more than doubled so far this year, making the company's market cap exceed $3 trillion.
