How increase in demand for Nvidia’s AI chips may have attracted closer look from regulators in this country

Nvidia

, the world's leading manufacturer of chips for artificial intelligence (AI) and computer graphics, is reportedly facing its first

antitrust charge

from a regulator.

French authorities

are set to file a formal accusation (statement of objections) against the company for allegedly anti-competitive practice.
Citing people with direct knowledge of the matter, a report by news agency Reuters said that the move comes after dawn raids conducted by French

regulators

last year in September.

These raids targeted the graphics card sector, reportedly including Nvidia. The investigation stemmed from a broader inquiry into

cloud computing

.
Notably, Nvidia previously acknowledged inquiries from regulators in the France, China and European Union (EU) regarding their

graphics cards

. The European Commission is currently holding off on expanding its preliminary review of Nvidia, deferring to the ongoing French investigation, the report cited other people with direct knowledge of the matter as saying.

French regulator is looking for potential abuse by chip providers

Recent developments, including the surge in demand for Nvidia chips due to the

generative AI application

ChatGPT, have triggered increased scrutiny from regulators.
According to a recent report by the French watchdog on competition in generative AI, there are concerns about potential abuse by chip providers. The report specifically mentions the dominance of Nvidia's CUDA chip programming software, which offers complete compatibility with essential GPUs for accelerated computing.

Additionally, the report raises concerns about Nvidia's recent investments in AI-focused cloud service providers like CoreWeave.
Since companies found to be in violation of French antitrust rules face fines of up to 10% of their global annual revenue, the same may happen with Nvidia. However, they can potentially avoid penalties by offering concessions to address competition concerns.
Meanwhile, the US Department of Justice (DOJ) has taken the lead role in investigating Nvidia, as part of a broader division of Big Tech scrutiny with the Federal Trade Commission.