Graphics card manufacturer NVIDIA saw its two French headquarters, located in Paris and Nice, raided on Tuesday by the Competition Authority, France’s antitrust watchdog.
The regulator announced that it had conducted "an unexpected visit and seizure operation at a company suspected of implementing anti-competitive practices in the graphics card sector."
Reports from local media Challenges later indicated that the company in question was NVIDIA, indicating that the operation was authorized by the liberty and detention judge (JLD) and aimed to gather evidence within the context of suspicions of "anti-competitive practices.”
Historically known for its graphics cards and technologies such as DLSS, Nvidia has established itself in the cloud sector, notably supplying server GPUs.
As of today, the overwhelming majority of semiconductors used for training AI models worldwide depend on two companies: Nvidia for design, and the Taiwanese TSMC for manufacturing.
It's also noteworthy that Nvidia, through its GeForce Now service, plays a crucial role in cloud gaming, having struck a decade-long deal with Microsoft to feature Xbox games.
The French antitrust watchdog further clarified that this action in no way pre-judges the company's guilt regarding the alleged practices.
Reached for comment by Decrypt, NVIDIA refused to comment. The French Competition Authority didn’t respond immediately.
Nvidia under scrutiny
This surprise check is linked to a larger, months-long probe into how the cloud industry works. In June, the French Competition Authority revealed an investigation into the cloud market.
During a press event, its president, Benoît Coeuré, then said that American companies like Amazon, Microsoft, and Google "are capable of hindering the development of competition" in the cloud market.
In 2021, the three companies "would have captured 80% of the growth in spending on public cloud infrastructure and applications" in France, meaning the entire range of remote computing services available to businesses.
The Competition Authority has also highlighted challenges in the sector, including issues for companies wanting to switch providers, assessing different service costs, and entry barriers faced by smaller cloud providers.
With the burgeoning growth of the artificial intelligence industry, NVIDIA has witnessed a substantial uptick in its revenues.
According to its most recent financial statement, the tech giant announced a revenue of $13.51 billion in its second fiscal quarter of 2023, marking a 101% surge compared to the previous year.
Highlighting its pivotal role in the development of advanced tools like ChatGPT, NVIDIA's valuation exceeded the $1 trillion benchmark this past May.