EU begins early-stage probe into AI chip market abuses that Nvidia dominates

The European Union is examining alleged anticompetitive abuses in chips used for artificial intelligence, a market that’s dominated by Nvidia Corp.

The European Commission has been informally collecting views on potentially abusive practices in the sector for so-called graphics processing units, to understand if there could be the need for future intervention, people familiar with the matter said. The early stage investigation may never result in a formal probe or penalties. 

It echoes a similar investigation by French authorities, who have been interviewing market players on Nvidia’s key role in AI chips, its price policy, the shortage of chips and its impact on prices, the people said who asked not to be identified because the matters are private.

The move from the bloc’s antitrust enforcers comes after the French competition watchdog earlier this week announced that it had raided the offices of a company suspected of engaging in “anticompetitive practices in the graphics cards sector.” The Wall Street Journal earlier reported that Nvidia was the target of the Paris raid.

Nvidia’s dominant role in supplying chips for artificial intelligence tasks is coming under closer scrutiny from regulators. The company’s graphics processor units, which first became popular in video games, are increasingly essential to new systems that are used to train large language models and other types of AI software.

Nvidia declined to comment. The European Commission didn’t immediately respond to a request for comment. The French competition authority couldn’t confirm that it was Nvidia hit by the raids this week. Representatives from the French finance and digital ministries declined to comment on the probe.  

GPUs have become one of the hottest commodities in the tech world, with cloud computing providers competing with one another to get access to them. Nvidia’s prized H100 processing units have helped them gain a market share of above 80%, according to estimates, ahead of rivals Intel Corp. and Advanced Micro Devices Inc. 

Should any future formal EU antitrust investigation be launched, firms accused of violations face orders to change their practices and penalties of as much as 10% of global annual revenue.