EU Says No Formal Investigation Into AI Chips After Nvidia Raid

Nvidia chief executive Jensen Huang. Image credit: Nvidia

European Commission says no formal probe as yet into AI chip sector, following raid of Nvidia’s offices by French competition authority

The European Commission has said it has no formal investigation into the market for graphics processing units (GPUs) used in the artificial intelligence market, following a raid by the French competition authority on Nvidia’s local offices last Wednesday.

“There is no formal investigation by the Commission into the matter you refer to,” the Commission told Reuters in an email, referring to the AI GPU market.

Bloomberg reported on Friday that the Commission has, however, been informally collecting views on potentially abusive practices in the sector to understand if there could be a need for future intervention.

The early-stage investigation may never result in a formal probe or penalties, Bloomberg reported, citing unnamed sources.

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AI chips

The French competition agency acknowledged it had carried out a dawn raid last Wednesday in “the graphics card sector”, without naming the target company.

But multiple reports citing unnamed people said the subject of the raid was Nvidia, by far the biggest supplier of GPUs used to train AI systems.

The French authority said the operation followed a broader inquiry into the cloud computing sector and concerns that cloud providers could use their access to computing power to exclude smaller competitors.

A June report by the French competition authority, the Autorité de la concurrence, or FCA, noted that the “increasing use of artificial intelligence will drive growth in demand for cloud services” and said competition regulators must “ensure that established players do not hinder the development of smaller or new players”.

Market dominance

The action is Nvidia’s first regulatory challenge since rising to dominate the AI GPU market.

The popularity of generative AI services, spurred by the public launch of ChatGPT last November, has led to a surge in demand for Nvidia’s chips that has resulted in a shortage.

Nvidia’s sales have surged in recent quarters and its market valuation rose beyond $1 trillion (£820m) in June.