French antitrust authorities have their eyes on Nvidia

The chipmaker was reportedly raided by French authorities last year in a visit and seizure operation after allegedly implementing anticompetitive practices.

French regulators are reportedly preparing to charge Nvidia for breaking competition laws in the country as the company continues to surge in value.

Nvidia has benefitted hugely from demand for its advanced chips that are powering large language models of some of the biggest AI companies, such as OpenAI.

Just weeks ago, it overtook both Apple and Microsoft briefly as the world’s most valuable company by market capitalisation. It has since been surpassed by both.

Now, people familiar with the matter told Reuters that French antitrust authorities are looking to charge Nvidia for violating antitrust rules.

The chipmaker was reportedly raided by French authorities last September in an unannounced visit and seizure operation after suspicions that it was implementing “anticompetitive practices”.

The raid was linked to a broader focus on the cloud computing sector, the regulator said. This linked back to a report from a year ago that said Microsoft, Google and Amazon Web Services dominated the sector and potentially hindered competition at the time.

The Wall Street Journal reported that Nvidia was the target of the raid while a French media site also reported that the raid hit a Nvidia office.

Nvidia reached a valuation of $1trn last year thanks to its focus on AI chips and hit the $2trn milestone briefly in February. The chipmaker managed to surge to a market cap of $3.02trn early last month.

Regulatory bodies in the US are also set to launch antitrust investigations into Nvidia, as well as Microsoft and OpenAI, to determine the extent of their dominance in the AI sector.

In its most recent earnings, Nvidia reported record quarterly revenue of $26bn – marking an 18pc increase over the previous quarter and a 262pc increase over the same period last year. Net income shot up too, going from $2bn a year ago to nearly $15bn as of May.

CEO and founder Jensen Huang said at the time that the “next industrial revolution has begun”.

“Companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centres to accelerated computing and build a new type of data centre – AI factories – to produce a new commodity: artificial intelligence,” Huang said.

“AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient, while expanding revenue opportunities.”

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