News Nvidia could receive French ban hammer — antitrust charges may follow government raids of Nvidia's offices in France

[Admin]

France's Autorité de la concurrence is set to launch antitrust charges against Nvidia for alleged anti-competitive practices, according to sources obtained by Reuters. Concern lies with Nvidia's proprietary software and partnership with CoreWeave.

Nvidia could receive French ban hammer — antitrust charges may follow government raids of Nvidia's offices in France : Read more

 

[DavidMV]

Zero chance of a large fine. Nvidia would leave France long before paying 10% of its revenue to France. France isn't a player in AI and has little to no leverage here. The US and Taiwan are the only countries with real leverage over Nvidia.

 

[ThomasKinsley]

Nvidia may indeed be a monopoly, but the French government receiving 10% of Nvidia's annual global revenue as a result of that potential fact makes no sense. In that scenario, Nvidia would do well to leave and let France deal with AMD and Intel.

 

[watzupken]

The things that the French regulatory body called out are factual. Just unfortunate that most nations just closed both their eyes to the issues.

 

[JTWrenn]

Why can't we get reasonable anti trust that is so damn late to the game that it doesn't matter? This late with a. Fine so out of whack that the company will just walk way is silly. The reporting is a bit wrong as well because it is up to and we know nothing about what they are going to do here. This feels very speculative at this point.

That said competition is good and we should have more but Nvidia making the best language for their own card is not the issue here. It is whatever buying or blocking they did to other companies.

 

[Alvar "Miles" Udell]

Price fixing...All you need to do is look back to the launch of the RTX 2000 series and the doubling of prices by nVidia AND AMD and the lack of price competition between the two since then which keep GPU prices high to see that there is definitely collusion and price fixing.

 

[Starman80]

Zero chance of a large fine. Nvidia would leave France long before paying 10% of its revenue to France. France isn't a player in AI and has little to no leverage here. The US and Taiwan are the only countries with real leverage over Nvidia.

I could see 0.1%, but not even 1% (let alone 10%!)

 

[hotaru251]

While I do agree its bad they are basically "the choice for ai related stuff" atm..

In this report, the Competition Authority expressed concern over the risk of abuse by chip providers. Specifically mentioned was "the sector’s dependence on Nvidia’s CUDA chip programming software (the only one that is 100% compatible with the [Nvidia] GPUs that have become essential for accelerated computing)."

this is a legit STUPID statement for the reasoning.
Yes, CUDA is annoyingly proprietary, however blame the devs of stuff that uses it...they could of chose not to. Nobody held a gun up and said you must build it to use cuda.

Theres even a growing collective to NOT use cuda just because nvidia is dangerous to the company rivals.

These Tech Titans Are Teaming Up Against Nvidia | The Motley Fool

Intel, Qualcomm, Arm, Google, and other tech giants are forming a new AI alliance.

www.fool.com

except from the article: "Several tech giants are supporting an open-source alternative to CUDA, Nvidia’s closed-source programming platform for its own GPUs."

 

[mikerahl]

The French and by extension, the EU could consider nationalizing all of Nvidia's patents and copyright and moving them to open source, allowing all their competitors free access to the technology. Instead of large fines, losing control of a monopolistic use of technology seems a much better solution

 

[HansSchulze]

There are huge costs with increasing performance by 50% per year, and every other year, doubling of mask prices and pancaking of yield levels to less than 50%. Take a look what the prices are for a brand new N4 TSMC wafer from scratch, it's in the billions of dollars. Then 6 months go by where there arent enough chips to feed the demand, scalpers buy the boards and resell for 2x. Same with 2 waves of miners. There's hundred(s) of bucks of cost in boards, memory chips, heating, power chips, over 1000 capacitors, and almost a thousand engineers who need to babysit testing, fault analysis, electron microscopes, and hundreds of supply chain, management, finance, logistics support people, just to make one product. Many work 10 or more hours a day, deal with remote locations in many timezones and barely have energy on a Saturday to go on a hike. 30,000 people, most of which work hard, and get diss from everyone because the latest tech is too expensive.
The place to look for monopolies is the solar industry, where panels are made in China for 50$, come to USA, list for 200$, and are sold for 40,000$ against a home mortgage. And we need tens of millions of those systems. A 5000$ heatpump cost $20,000 installed in 1 day by 2 guys. Why? Cause they can. Same with defense and construction. Some of their margins are as high as 500%. The heatpump also probably cost 1000$ to make, not including engineering.
Those costs affect every one, and way more power consumption and CO2 than GPUs. Only advantage is to reduce power by 50%.
Nvidia has to guess whats going to be relevant next year, and what Elon and Sam are going to invent next. Elon wasn't convinced when we gave him HW2.5. HW3 HW4 and now HW5 at 10x faster underlines how hard it is to figure out how to do next years's AI. Finally, Elon gets it. With ten competitors ready to slash into the biz if Nvidia makes a serious mistake. Never in the history of mankind have so many human endeavors had so much potential to break open in the next few years. Your next drugs, proteins, enzymes, will be designed, vetted, simulated by GPUs. What is that worth? 10 years of life?
Alternatively, why are Epipens 500$ when they can save a life? They won't at that price.

Price fixing...All you need to do is look back to the launch of the RTX 2000 series and the doubling of prices by nVidia AND AMD and the lack of price competition between the two since then which keep GPU prices high to see that there is definitely collusion and price fixing.

 

[Amdlova]

Nvidia pay something? They push some politics and that fade away

 

[KnightShadey]

Zero chance of a large fine. Nvidia would leave France long before paying 10% of its revenue to France. France isn't a player in AI and has little to no leverage here. The US and Taiwan are the only countries with real leverage over Nvidia.

The EU has also been investigating this and has let France take the lead as they had jurisdiction and legal abilities to conduct raids in Sept.

That this is still being pursued 9 months after the raids shows that there is more than nothing there.
If Frances gets enough evidence to charge it will be able to press the E.U.'s case as well which is where the elevated 10% penalty originated (just like in Apple's & Meta's cases) and is harder to ignore than just the French market alone.

It also makes other jurisdictions think, if there's smoke, and if they can do it successfully, perhaps there is evidence in our markets.

None of this is good for nV, nor should it be easily dismissed, even if the high end penalty of 10% global revenue is very unlikely the fact that it's still continuing is more than nothing.

 

[derekullo]

Have the French do what they do best and surrender!
Leave NVIDIA and its stock price alone!

 

[shalako33]

There are huge costs with increasing performance by 50% per year, and every other year, doubling of mask prices and pancaking of yield levels to less than 50%. Take a look what the prices are for a brand new N4 TSMC wafer from scratch, it's in the billions of dollars. Then 6 months go by where there arent enough chips to feed the demand, scalpers buy the boards and resell for 2x. Same with 2 waves of miners. There's hundred(s) of bucks of cost in boards, memory chips, heating, power chips, over 1000 capacitors, and almost a thousand engineers who need to babysit testing, fault analysis, electron microscopes, and hundreds of supply chain, management, finance, logistics support people, just to make one product. Many work 10 or more hours a day, deal with remote locations in many timezones and barely have energy on a Saturday to go on a hike. 30,000 people, most of which work hard, and get diss from everyone because the latest tech is too expensive.
The place to look for monopolies is the solar industry, where panels are made in China for 50$, come to USA, list for 200$, and are sold for 40,000$ against a home mortgage. And we need tens of millions of those systems. A 5000$ heatpump cost $20,000 installed in 1 day by 2 guys. Why? Cause they can. Same with defense and construction. Some of their margins are as high as 500%. The heatpump also probably cost 1000$ to make, not including engineering.
Those costs affect every one, and way more power consumption and CO2 than GPUs. Only advantage is to reduce power by 50%.
Nvidia has to guess whats going to be relevant next year, and what Elon and Sam are going to invent next. Elon wasn't convinced when we gave him HW2.5. HW3 HW4 and now HW5 at 10x faster underlines how hard it is to figure out how to do next years's AI. Finally, Elon gets it. With ten competitors ready to slash into the biz if Nvidia makes a serious mistake. Never in the history of mankind have so many human endeavors had so much potential to break open in the next few years. Your next drugs, proteins, enzymes, will be designed, vetted, simulated by GPUs. What is that worth? 10 years of life?
Alternatively, why are Epipens 500$ when they can save a life? They won't at that price.

That was the scalpers and miners and stores. Ask Nvidia and AMD they'll tell you.

 

[slightnitpick]

Specifically mentioned was "the sector’s dependence on Nvidia’s CUDA chip programming software (the only one that is 100% compatible with the [Nvidia] GPUs that have become essential for accelerated computing)." A red flag was also raised by Nvidia's investments in AI cloud providers like CoreWeave, investment partnerships that may unduly inflate Nvidia's market performance.

So two issues here:

1. Lack of published APIs that would allow third parties to make 100% compatible competitive alternatives to CUDA? If I'm inferring correctly. Patent laws allow an inventor exclusive right to benefit from their patent, but they must publish sufficient information for a third-party to fully replicate the patented thing.
2. Horizontal integration* which allows NVIDIA to edge out competitors on a basis other than the superiority of their patented product.

These seem plausible. They should also be pretty straight forward to rectify through sufficient documentation and through divestment.

* - It may be the fact that it's leveraged integration through investment in downstream companies, not through buying them out entirely, that's the problem. Though if they bought out enough of the market entirely that would obviously be another sort of anti-trust problem too.

 

[slightnitpick]

Have the French do what they do best and surrender!
Leave NVIDIA and its stock price alone!

History goes in cycles some times. A century before the French were cheese-eating surrender monkeys they were wine-gulping conquest apes. We may be coming back around again.

 

[35below0]

Rubbish.

There is a monopoly and then there is cornering the market.
Also, AI is not essential and is largely a gimmick. Nvidia will reap the rewards of the AI boom and they fully deserve to do so. We don't have to like them but it is not justice to pull the rug out from under them just as they're about to cash in. Nvidia invested heavily in this fad. It's their rivals own fault they didn't develop as much and can't compete.

The only way Nvidia gets into any trouble is state aid. But the reason Nvidia are on top of the AI game is not state aid or subsidies.

Also also, the last thing a French court should look too closely into, is state subsidies.

Rubbish.

 

[KnightShadey]

Rubbish.

There is a monopoly and then there is cornering the market.

Irrelevant, if the issue is "anti-competitive practices" as claimed, that is all that is required, same as collusion can be the #2 & 3 players and still be illegal.

Also, AI is not essential and is largely a gimmick. Nvidia will reap the rewards of the AI boom and they fully deserve to do so. We don't have to like them but it is not justice to pull the rug out from under them just as they're about to cash in. Nvidia invested heavily in this fad. It's their rivals own fault they didn't develop as much and can't compete.

If they did so in an unacceptable manner, then it is nVidia's fault. And to be clear the US is also perusing these same questions, and like the E.U. will probably await the French findings to inform their case.

The argument about subsidies is itself rubbish, especially from an American company, and not relevant to this. Heck, bribery & non-compete/exclusivity contracts is more likely in such cases than subsidies.

As mentioned in the article and further expounded on by Reuters: "The Authority also outlines potential risks from chip providers, including price fixing, production restrictions, and unfair contract conditions/behaviors." while not directly naming nVidia, despite them being the only company named in the statement of objections.

 

[35below0]

price fixing, production restrictions, and unfair contract conditions/behaviors

Price fixing and contract bullying is not the same as anti-trust and monopoly charges.

When Microsoft faced the music in the 90s and 00s, they were a monopoly effectively. No one else was making competitive OSs.
Nvidia has two major competitors at least. The price fixing and strongarm tactics is something investigators should look into. But a monopoly is out of the question as are anti-trust allegations.

 

[KnightShadey]

Price fixing and contract bullying is not the same as anti-trust and monopoly charges.

I didn't say it was. I just quoted the section of the article that was outlined in the statement of objections in addition to anti-competitive practices charges, showing that those are the other claims, and not subsidies.
However price fixing is something that is usually viewed as a monopoly or monopsony power that can be abused as a price maker.

Also, I think you're getting stuck on the "Anti-trust" headline which was probably mis-assigned by the AI generator at THG, probably best to read the more accurate descriptions by Reuters, etc. before arguing the headline.

When Microsoft faced the music in the 90s and 00s, they were a monopoly effectively. No one else was making competitive OSs.
Nvidia has two major competitors at least. The price fixing and strongarm tactics is something investigators should look into. But a monopoly is out of the question as are anti-trust allegations.

I think you're mis-remembering the era. Apple's market share finally rebounded above 10% in 1999 to about ~12% of the US market thanks to the iMac and iBook (it was still only about 5-7% worldwide), and we are talking about established OSes (pre-OSX) not even Linux that was displacing Windows CE in some devices at the time (long before Android). On the browser front IE was definitely below Netscape for install base when the time period started regarding bundling , so it would be using it's position to increase it's share vs others (Netscape, Mozilla, Opera for business, etc..) to gain top spot by 1999/2000. So it's not even about the OS but it's overall bundling practice of other components to make it pointless for people to waste money on other products, even getting looked at for the inclusion of Wordpad, and Paint.

nVidia is commonly quoted as having ~90+% market share in AI hardware, with folks like The Economist claiming 95% and, I've even seen the 89% claim on THG. So nVidia would be using it's position to defend it's share against the myriad of new entrants.

Even if much less of the market (even 40% if all others were tiny fragments) nVidia could still qualify as a monopoly, if it used it's power as the single biggest seller to restrict competition (usually dumping is effective when about half and looking to consolidate market share by bankrupting the tiny players, but also effective as a larger player). They can also leverage a bigger position especially if they tied support of existing customer hardware to future/continued sales in order to restrict competition, where they tie software and hardware together similar to M$ with OS and Browser.

There is also a myriad of other tactics they could use (especially at ~90%) and they can be very subtle when just maintaining dominance vs trying to unseat a competitor using your position/resources, but the list is long and I'm not about to imply they did anything outside of the current charges.

I personally think the originally proposed remedy for Micro$oft should have been implemented (break up M$ into separate OS company, software company, and browser company), as it likely would've given us a much better computer ecosystem. It likely would've also had a chilling effect on all the mergers and acquisitions that consolidated power/control and have created the customer-antagonistic computer (and entertainment) industry we have today, including all the acquisitions by AMD, Amazon, Apple, Google, intel, and nVidia (including the murky partnerships with 3rd parties like CoreWeave named in the article).

A graphic included in the background to the complaint does a good job of illustrating this consolidation of power across the industry, it makes it pretty clear whose fingers are in the most pies...

 

[HansSchulze]

That was the scalpers and miners and stores. Ask Nvidia and AMD they'll tell you.

Sorry, I don't get your question or point. How many were being sold at list price?

My point was that no one outside of NV or AMD or Intel or Broadcom have an idea how expensive it is to make square inch silicon at TSMC, and write good software for it.
Also, what's the difference between capitalism and supply chain economics? If only a few companies have enough $billions to make a good system, obviously the market entry is long and painful (30 to 50 years). Why hasn't Intel beat NVIDIA? They are too old, slow, and sloppy, just look at their latest CPU failures, 13th gen falling apart.
NVIDIA had to use everyone's tricks (AMD's COWOS packaging and HBM tech), and invent many of their own to get to where they are, and GPUs are still only <25% efficient at AI training. They need all hands on board to design 3 years down the road for the next incarnation of an AI GPU, maybe a specialized chip, maybe a complete rewrite from scratch, 1000's of man years of work. NVIDIA has one of the highest engineer% population of all companies in the world, busy making the next Thing. I know, I spent 23 years there.