Reports have surfaced indicating that French antitrust authorities have initiated an investigation into the cloud computing sector. Nvidia, a global juggernaut in artificial intelligence (AI) chip manufacturing, headquartered in sunny California, has reportedly found itself in the midst of a police raid at its French offices this week. This dramatic turn of events is part and parcel of a broader inquiry undertaken by French antitrust authorities into the enigmatic realm of cloud computing. Although the Wall Street Journal diligently reported on this raid on September 28, both Nvidia and the French enforcement agencies have chosen to remain tight-lipped, refraining from any official commentary on the matter.
A press release found on the official webpage of the French antitrust agency, known as Autorité de la Concurrence, alludes to an unscheduled inspection targeting the graphics cards sector. According to this release, a judge granted authorization for the raid based on suspicions of the company’s involvement in “anticompetitive practices in the graphics cards sector.” It is essential to clarify, however, that the raid itself does not inherently imply any breach of the law that can be attributed to the company. This clarification comes directly from the agency’s official statement.
Autorité de la Concurrence makes reference to its own perspective, a culmination of a year-long examination of the cloud computing sector, published in June 2023. Intriguingly, this report makes no mention of Nvidia. Instead, it casts its spotlight on other tech giants, particularly the trio of hyper-scalers: Amazon Web Services, Google Cloud, and Microsoft Azure. According to the agency’s data, these three behemoths accounted for a staggering 80% of the growth in spending on public cloud infrastructures and applications in France during 2021.
The agency goes further, stating, “Amazon and Microsoft collectively raked in 46% and 17% of revenues from IaaS and PaaS services in 2021. With their substantial financial resources and expansive digital ecosystems, these hyper-scalers possess the capability to impede the development of competition.” To counteract this trend, Autorité de la Concurrence is diligently exploring an array of options within the framework of both national competition laws and the European Data Act.
Nvidia’s presence on the regulators’ radar is due to its distinctive role as a hardware producer for some of the most cutting-edge sectors within the digital industry. Recent quarterly reports from the company revealed that United States regulators have urged them to restrict exports of AI chips to “certain Middle Eastern nations.” Interestingly, the U.S. Department of Commerce swiftly denied these claims a day later.
