Nvidia Linked to Dawn Raid by French Competition Regulators

(Bloomberg) — French antitrust enforcers raided the offices of a business suspected of engaging in “anticompetitive practices in the graphics cards sector,” targeting a company that the Wall Street Journal identified as Nvidia Corp.

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“Raids do not presuppose the existence of a breach of the law,” France’s competition authority said in a statement on its website, “which only a full investigation into the merits of the case could establish, if appropriate.”

The agency didn’t cite Nvidia by name, and the Santa Clara, California-based company declined to comment on the matter.

The move suggests Nvidia’s dominant role in supplying chips for artificial intelligence tasks is coming under closer scrutiny. The company’s graphics processor units, which first became popular in video games, are increasingly essential to new systems that are used to train large language models and other types of AI software.

Nvidia’s GPUs have become one of the hottest commodities in the tech world, with cloud computing providers struggling to get enough of them. The company has said that it is trying to boost supply of its products as fast as possible to meet the surging demand. Nonetheless, shortages and remarks made by prominent tech executives, such as Oracle Corp.’s Larry Ellison, have spotlighted the issue.

The frenzy has sent Nvidia’s sales — and market capitalization — soaring. The company became the first chipmaker to achieve a trillion-dollar valuation earlier this year, and it now stands at $1.07 trillion.

The shares gained 1.5% to $430.89 at the close in New York trading Thursday, bringing their year-to-date gain to 195%.

The dawn raid was authorized by a liberty and custody judge, France’s competition authority said in its statement. The move followed a report by the agency on competition in the cloud computing market that was published on June 29.

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Rivals Intel Corp. and Advanced Micro Devices Inc. are playing catch-up in the AI chip market. They have their own products that compete with Nvidia’s prized H100 processors, but have yet to make a dent in the company’s market share, which is above 80% by some estimates.

Nvidia H100 chips — mounted on cards for installation into server computers — fetch more than the price of a family car, according to online retailers.

(Updates with shares in seventh paragraph.)

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