The European Union is reportedly looking into possible antitrust violations by Nvidia, the world's largest maker of artificial intelligence chips. According to Bloomberg, the EU's competition watchdog is concerned that Nvidia may be abusing its dominant position in the AI chip market to stifle innovation and harm consumers.
Nvidia is best known for its graphics processing units (GPUs), which are specialized chips that can handle complex calculations and render high-quality images. GPUs are also essential for AI applications, such as deep learning, computer vision and natural language processing, because they can process large amounts of data faster and more efficiently than traditional CPUs. Nvidia has been leading the AI chip market with its GPUs, which are used by many tech giants, such as Google, Facebook and Amazon, as well as researchers, developers and startups.
Nvidia has been on a buying spree in recent years, acquiring several companies that specialize in AI software and hardware. However, one of its main targets, Arm, the British chip designer that powers most of the world's smartphones and tablets, decided to go public through an initial public offering (IPO) instead of selling to Nvidia. The IPO, which was announced in September 2023, valued Arm at $80 billion and attracted strong demand from investors.
The EU is not the only regulator that is scrutinizing Nvidia's expansion. The UK, China and the US are also reviewing Nvidia's other deals, and some of Nvidia's rivals have voiced their opposition to its market dominance. They argue that Nvidia would have too much control over the AI chip industry, and could raise prices, limit supply or block access to its technology.
Nvidia has denied any wrongdoing and said that it is cooperating with the regulators. The company has also claimed that its acquisitions would benefit the AI ecosystem by creating more innovation and competition. Nvidia has said that it would respect the independence and customer neutrality of the companies it buys, and that it would invest in their research and development.
The EU's investigation into Nvidia's AI chip market practices is still in its early stages, and it is unclear if it will lead to any formal charges or sanctions. However, the probe could pose a serious threat to Nvidia's ambitions and reputation, as well as its stock price, which has soared more than 200% in the past year.