The French antitrust authority is reportedly preparing to issue charges against Nvidia, the world's largest manufacturer of computer chips for artificial intelligence and graphics, for alleged anti-competitive practices.

This move would mark the first regulatory action against the tech giant in this area.

First reported by Reuters, the impending charges, known as a statement of objections, follow dawn raids conducted in the graphics cards sector last September, which were part of a broader investigation into cloud computing. These raids are believed to have targeted Nvidia specifically.

Nvidia has experienced a surge in demand for its chips following the release of generative AI applications like ChatGPT, drawing increased regulatory scrutiny on both sides of the Atlantic. The company disclosed in a regulatory filing last year that authorities in the European Union, China, and France had requested information about its graphics cards.

The French competition watchdog recently expressed concerns about the AI sector's reliance on Nvidia's CUDA chip programming software, which is currently the only system fully compatible with the GPUs essential for accelerated computing. Additionally, the regulator voiced unease about Nvidia's recent investments in AI-focused cloud service providers such as CoreWeave.

While the French authority and Nvidia have declined to comment on the matter, sources suggest that the European Commission is unlikely to expand its preliminary review at this time, given the ongoing French investigation.

If found in breach of French antitrust regulations, Nvidia could face fines of up to 10 per cent of its global annual turnover. However, the company may have the opportunity to offer concessions to avoid penalties.

In the US, the Department of Justice is reportedly taking the lead in investigating Nvidia as part of broader scrutiny of Big Tech companies, working in tandem with the Federal Trade Commission.

As the AI industry continues to evolve rapidly, this case could set a significant precedent for future regulation of key players in the sector.

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