On alert on the cloud, the Competition Authority invites itself to Nvidia

Estimated read time 2 min read

On alert on the cloud, the Competition Authority invites itself to Nvidia

Who is making the rain or shine today in the world of graphics cards, but also in artificial intelligence through these more critical equipment than ever? The Competition Authority does not give a name.

On the other hand, it announces that, last week, it carried out a search of a company in the sector and suspected of having implemented anti-competitive practices. The Wall Street Journal is selling the wick: it’s about Nvidia.

GPU-dependent cloud providers

The GPU giant has little competition at the moment anyway, as it is supplanting its rivals, Intel and AMD in particular. For cloud providers, equipping themselves with Nvidia graphics processors is an economic imperative to offer AI services to their customers.

Last week, in France alone, Scaleway and OVHcloud both signed agreements with the American and announced new offers dedicated to artificial intelligence and based on the latest GPUs from the manufacturer.

The boom in generative AI, which consumes computing resources for training and model inference phases, is a boon for Nvidia. But isn’t this business opportunity accompanied by anti-competitive practices?

This is what the French Competition Authority is trying to determine, which has thus carried out a so-called “unannounced visit and seizure” operation.”Impromptu, the visit had previously received the authorization of a judge of freedoms and detention.

One more barrier in the cloud market?

The search is formalized by the general rapporteur of the authority, who however does not specify the identity of the company concerned in his press release, nor the practices involved. On the other hand, the Authority points out that this operation is part of a broader procedure.

Indeed, in June, it made a first assessment of its analysis of market practices in the cloud in France. Hyperscalers are the center of attention. Some of their habits, such as cloud credits, could constitute barriers to entry.

What if preferential agreements between hyperscalers and GPU manufacturers were today, too, a way for the cloud giants to lock down the market? The demand for AI and graphics cards also favor Nvidia. Would the founder abuse it?

“At this stage, this intervention obviously does not prejudge the guilt of the company concerned by the alleged practices, which only a substantive investigation will allow, if necessary, to establish,” replies the Competition Authority.

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