French Authorities Raid Nvidia in Cloud Computing Antitrust Probe

The French offices of Nvidia, one of the global leaders in artificial intelligence (AI) semiconductor production with headquarters in California, reportedly experienced a police raid this week.

The action was taken as part of a French antitrust investigation into the cloud computing industry. The Wall Street Journal reported the investigation on September 28, but neither Nvidia nor the French enforcement agencies have issued official statements regarding the incident.

A press release on the website of the French antitrust agency, Autorité de la Concurrence, mentions an unannounced inspection in the sector of graphics cards.

According to the release, a magistrate authorized the raid on the premise that the company had “implemented anticompetitive practices in the graphics card sector.”

However, the operation itself does not “presume the existence of a law violation that could be attributed to the company,” according to the agency’s message.

The Autorité de la Concurrence refers to its own opinion, which was issued after a year-long investigation of the cloud computing industry.

The study, published in June 2023, does not mention Nvidia but instead concentrates on three hyperscalers: Amazon Web Services, Google Cloud, and Microsoft Azure.

According to the agency’s data, they will account for 80% of the increase in spending on public cloud infrastructure and applications in France in 2021.

“Amazon and Microsoft have captured 46% and 17% respectively of revenues from IaaS and PaaS services in 2021. Given their financial capacities and their digital ecosystems, these hyperscalers are in a position to hinder competition development.”

The agency is contemplating several options under national competition laws and the European Data Act to combat this trend.

Nvidia attracts the attention of regulators due to its distinct position as a manufacturer of hardware for the most innovative sectors of the digital industry.

The company’s most recent quarterly report reveals that U.S. regulators asked it to limit exports of AI processors to “some Middle Eastern countries.” The U.S. Department of Commerce denied this information the following day.