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Nvidia to face French antitrust charges, sources say

French antitrust regulators will charge Nvidia with alleged anticompetitive behavior, making it the first enforcer to take action against the computer chip maker, people familiar with the matter said.

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France’s so-called statement of objections, or letter of accusation, follows a raid on the graphics card industry last September that sources said was aimed at Nvidia (NASDAQ:NVDA). The raid was the result of a broader investigation into cloud computing.

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The world’s largest maker of artificial intelligence and computer graphics chips has sparked regulatory scrutiny on both sides of the Atlantic after demand for its chips surged following the release of generative AI app ChatGPT.

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French authorities issued some but not all of the statement of objections to the company, and Nvidia declined to comment. The company said in a regulatory filing last year that regulators in the European Union, China and France had all requested information about its graphics cards.

Other people familiar with the matter said the European Commission is unlikely to expand its preliminary review for now because French authorities are investigating Nvidia.

French regulators flagged the risk of abuse by chip suppliers in a report on generative AI competition released last Friday.

It expressed concern about the industry’s reliance on Nvidia’s CUDA chip programming software, the only system that is 100% compatible with the GPUs necessary for accelerated computing.

It also cited unease about Nvidia’s recent investments in AI-focused cloud service providers like CoreWeave.

Companies that violate French antitrust rules can be fined up to 10% of their global annual turnover, but they can also offer concessions to avoid penalties.

The U.S. Justice Department is leading the investigation of Nvidia as it works with the Federal Trade Commission to scrutinize big tech companies, a person familiar with the matter told Reuters.

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