French authorities reportedly raided Nvidia’s local offices this week to investigate the company’s suspected anti-competitive practices. The raid was based on a final opinion report by the Autorité de la concurrence which published a market study on cloud sector competition in June.
This is the first accusation Nvidia has faced since it became one of the top suppliers of artificial intelligence chips since it started pushing its programming language as early as 2006. The company was identified as being the targeted raid, first reported by The Wall Street Journal which cited unnamed sources familiar with the matter.
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The Autorité de la concurrence did not confirm in a press release on Wednesday whether the raid was on Nvidia, stating only that it “carried out a dawn raid at the premises of a company suspected of having implemented anticompetitive practices in the graphics cards sector.”
In the summer of 2022, the French authorities published an early report of their initial findings while looking into the cloud layers as they related to IT infrastructure, and published its final opinion nearly a year later.
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The results said: “The likelihood of a new operator being able to gain market share rapidly appears limited, excluding companies who are already powerful in other digital markets.”
Major tech companies including Microsoft and Amazon purchased Nvidia’s high-end processors to use in the development of generative AI language models, resulting in a large profit for Nvidia. The company reported earning $13.5 billion in August, marking a record revenue increase of 101% from the same time last year. Its second quarterly report said Nvidia’s revenue had also increased by a shocking 88% from the first quarter of this year. “A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” Jensen Huang, founder and CEO of Nvidia said in the Q2 report. The rise of generative AI is reportedly behind Nvidia’s skyrocketing revenue, raising its valuation to $1 trillion in June.
In the French competition authority report, Nvidia is not specifically listed, but it says that “increasing use of artificial intelligence will drive growth in demand for cloud services,” adding that based on rising cloud technologies, competition regulators must “ensure that established players do not hinder the development of smaller or new players.”
The Autorité de la concurrence did note in its report that the “dawn raids do not pre-suppose the existence of a breach of the law which could be imputed to the company involved in the alleged practices.” It added that only by conducting a full investigation, would it be able to establish the merits of the case.
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This is not the first time French authorities have cracked down on big tech companies’ practices. In September, the country threatened to recall Apple’s iPhone 12 and suspended its sales after it found exceedingly high radiation levels emitted from the phone, resulting in Apple releasing a software update to the French market, claiming it had fixed the problem.
Nvidia did not immediately respond to Gizmodo’s request for comment.
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