April 19, 2024
French authorities raid Nvidia's offices in antitrust probe.
AI

Nvidia Faces French Police Raid in Cloud Computing Antitrust Probe

Nvidia, a prominent player in AI chip production with its headquarters in California, reportedly underwent a police raid at its French offices this week. This action was part of a broader investigation by French antitrust authorities into the cloud computing sector.

The Wall Street Journal covered the raid on September 28, with neither Nvidia nor French law enforcement agencies providing official statements on the incident.

A press release on the website of the French antitrust agency, Autorité de la Concurrence, mentions an unannounced inspection within the graphics cards sector. According to the release, a judge authorized the raid on the suspicion that the company had engaged in anticompetitive practices in the graphics card sector.

However, it’s essential to note that the raid itself does not imply that the company has necessarily violated any laws, as clarified by the agency. The Autorité de la Concurrence refers to its own opinion, which was the result of a year-long examination of the cloud computing sector. Published in June 2023, this study did not reference Nvidia but primarily focused on other tech giants, specifically Amazon Web Services, Google Cloud, and Microsoft Azure. According to the agency’s data, these three hyper-scalers accounted for 80% of the spending growth in public cloud infrastructures and applications in France in 2021. Amazon and Microsoft captured 46% and 17%, respectively, of revenues from IaaS and PaaS services in 2021. Given their substantial financial resources and digital ecosystems, these hyper-scalers have the potential to impede competition.

The agency is exploring various avenues under national competition laws and the European Data Act to address this concern.

Nvidia came under regulatory scrutiny due to its distinctive role as a hardware producer for the most cutting-edge segments of the digital industry. In a recent quarterly report, the company revealed that U.S. regulators had requested that it restrict the export of AI chips to certain Middle Eastern countries. However, the U.S. Department of Commerce denied this claim a day later.

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