Being targeted by regulators after dominating the market? NVIDIA rumored to be sued by French antitrust authorities

According to the financial news app Zhitong Finance, NVIDIA (NVDA.US), the world's most valuable chip manufacturer, is facing increasing regulatory scrutiny. Informed sources revealed that the French antitrust enforcement agency is preparing to accuse the chip giant of anti-competitive behavior. The French agency will be the first in the world to take such action, following last year's raid on NVIDIA's offices.

Since becoming the biggest beneficiary of the artificial intelligence spending boom, NVIDIA has attracted the attention of regulatory authorities. Its graphics processing units (GPUs) are favored by data center operators for their ability to handle the massive amounts of information required to develop AI models.

The French antitrust agency declined to comment to Bloomberg, and NVIDIA also declined to comment.

NVIDIA fell 3.8% on Monday before rebounding slightly. The stock price has more than doubled this year, with the company's valuation exceeding $3 trillion.

In September last year, French antitrust enforcement officers raided an office of a company suspected of "engaging in anti-competitive practices in the graphics card sector." At that time, the company was not identified as NVIDIA, but the chip manufacturer later admitted that France and other countries were investigating its business practices. In a filing submitted in February, NVIDIA stated that officials in the United States, the European Union, China, and the United Kingdom are also reviewing its operations.

NVIDIA stated at the time: "Our position in the AI-related markets has led global regulatory authorities to take an increasing interest in our business."

The French antitrust watchdog has interviewed market participants about NVIDIA's key role in AI processors, pricing policies, chip shortages, and their impact on prices. The office raid is aimed at gathering more information on potential abuses of dominant position.

Fines for violating French antitrust laws can amount to 10% of a company's global annual revenue. The agency imposed its largest fine since 2011 in 2020, totaling 1.24 billion euros (1.33 billion U.S. dollars). Of this amount, 1.1 billion euros were imposed on Apple Inc. (AAPL.US), with the remainder on two distributors.

In Brussels, the European Commission has informally gathered opinions on whether NVIDIA has also violated its antitrust rules, but has not yet launched a formal investigation into anti-competitive behavior.

In November, French Finance Minister Bruno Le Maire stated that NVIDIA's dominant position has led to "increasingly serious inequalities between countries" and stifled fair competition. He said that 92% of GPUs come from NVIDIA.

Le Maire said: "If we want fair competition, we need many private companies, not one company that could sell all devices."