EU Eyes Nvidia, Scrutiny Intensifies Over AI Chip Market Dominance

The European Union scrutinizes the AI chip market focusing on potential anticompetitive behaviors. It comes in light of Nvidia Corp NVDA holding a dominant position in the sector, raising concerns among regulators.

The European Commission is in the preliminary stages of investigating the AI chip sector, particularly graphics processing units (GPUs). They are gathering insights to determine if intervention is needed to curb potentially abusive practices, Bloomberg reports.

The U.S. Defense Department has also ramped up the pressure on AI firms over transparency regarding their technology. 

French regulators are also probing Nvidia's significant role in the AI chip market. 

Concerns revolve around the company's pricing policies and the ongoing chip shortage, which is suspected to be influencing the escalation of prices. 

The French competition watchdog has even raided a company's offices suspected of anticompetitive behaviors in the graphics cards sector.

Initially famous in the gaming industry, Nvidia's GPUs have become integral in training large language models and other AI software. 

The company's H100 processing units have propelled it to secure over 80% of the market share, outpacing competitors like Intel Corp INTC and Advanced Micro Devices Inc AMD.

The potential for a formal EU antitrust investigation loom as Nvidia faces increased examination. 

Companies guilty of anticompetitive practices could face penalties of up to 10% of their global annual revenue. 

Previously, Nvidia's ambitions to snap British chip designer Arm Holdings Plc ARM succumbed to the global regulatory opposition.

Price Action: NVDA shares traded higher by 1.21% at $440.24 premarket on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.