EU Examines Alleged Anticompetitive Practices in AI Chips Market Dominated by Nvidia

The European Union is reportedly investigating alleged anticompetitive practices in the market for chips used in artificial intelligence (AI), with Nvidia being the dominant player, according to Bloomberg News. The European Commission has been informally gathering opinions on potential abusive practices in the graphics processing units (GPU) sector, which are used for both AI applications and gaming. The purpose of this inquiry is to determine if future intervention is necessary. It is important to note that this preliminary investigation may not lead to a formal probe or penalties.

Nvidia, which currently holds an 80% market share in the GPU industry, declined to comment on the matter. The European Commission has not yet responded to Reuters’ request for comment. Additionally, French authorities have been conducting interviews with market players regarding Nvidia’s prominent role in AI chips, its pricing policies, the chip shortage, and its impact on prices.

The French competition authority recently conducted a raid on a company in the “graphics cards sector,” which sources have confirmed to be Nvidia. The company’s stock and demand for its chips experienced a significant surge after the remarkable success of the generative AI chatbot, ChatGPT, last year. Nvidia’s chips are widely used in systems worldwide that power applications like ChatGPT, making it the only trillion-dollar semiconductor firm globally.

As the investigation progresses, it remains to be seen whether any formal actions will be taken against Nvidia or if the market dynamics will undergo significant changes. Both the European Union and French authorities are closely monitoring the situation and gathering information to ensure fair competition in the AI chips market.