Proactive Investors - NVIDIA Corporation (NASDAQ:NVDA), the technology giant, suffered a surprise raid by France’s competition authority at its local offices, signalling the company’s first significant regulatory scrutiny since becoming a major supplier of artificial intelligence (AI) chips.
While the nature of the investigation hasn't been disclosed, it is understood to be related to the “graphics cards sector”, reports from the Wall Street Journal revealed.
Raids like these usually last a few hours and take place early in the morning, with authorities seizing physical and digital materials, as well as interviewing employees who arrive for work.
Being the world’s largest maker of chips for AI and computer graphics, Nvidia has seen a surge in demand for its products due to the rise of generative AI systems such as OpenAI’s ChatGPT, leading to a shortage of chips.
Following a broader inquiry into the cloud-computing sector, the French authority said it is focusing on concerns that companies in this industry could leverage their computing power to limit the effectiveness of smaller competitors.
Chips, initially designed for computer graphics, have become crucial for AI computations, and Nvidia has become a key supplier with major cloud computing companies like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Google (NASDAQ:GOOGL) relying heavily on it, helping the US firm’s sales grow sustainably and reach a valuation above US$1 trillion back in June.
Nvidia’s H100 chips, vital for AI applications, were recently embraced by French companies Iliad Group and OVHcloud, earlier this week.
Shares in Nvidia are up a little over 1% in pre-market trading on Friday, having closed at around US$430.