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European Commission starts investigating GPU-maker’s dominance in AI chips

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NVIDIA seems to be in massive trouble in the EU. Given the prowess of its AI chips, it is the most valuable chipmaker in the world. However, it is now under investigation over accusations of abusing its AI-chips power to maintain its dominant position in the market

The European Union is currently investigating suspected anti-competitive conduct within the field of artificial intelligence chip technology, a sector where NVIDIA holds a dominant position. This development was reported by Bloomberg News on Friday, with information provided by individuals who are knowledgeable about the situation.

According to the report, the European Commission has been in the process of informally gathering feedback and opinions pertaining to potential exploitative practices in the graphics processing units (GPU) industry. These GPUs are employed not only in AI applications but also in the realm of gaming. The objective of this exercise is to assess whether there is a necessity for regulatory intervention in the future.

The preliminary inquiry currently underway may not necessarily lead to a formal investigation or the imposition of penalties, as stated in the report.

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NVIDIA, a company that wields significant influence over the GPU market with an impressive 80 per cent market share, chose not to provide a comment on the matter.

In parallel, French authorities have been engaging in discussions with industry stakeholders regarding NVIDIA’s prominent position in the AI chip sector. These discussions encompass topics such as NVIDIA’s pricing strategies, the chip shortage, and its potential effects on market prices, as mentioned in the report.

On Tuesday, the competition authority in France carried out an unexpected operation at a company operating within the “graphics cards sector.” According to an individual with insider information, this company is believed to be NVIDIA, as per a report by Reuters.

NVIDIA experienced a significant surge in both its stock value and demand for its chips following the remarkable success of the generative AI chatbot, ChatGPT, last year.

NVIDIA’s chips are integral components in nearly all computing systems worldwide that drive applications similar to ChatGPT. This pivotal role is a major contributing factor to NVIDIA’s status as the sole trillion-dollar semiconductor company on the global stage.

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