The European Union's antitrust regulators are conducting an inquiry into Nvidia (NASDAQ:NVDA)'s sales practices, questioning whether the leading artificial intelligence chipmaker is engaging in unfair bundling of its products, according to a report from Reuters. Sources familiar with the matter indicate that this scrutiny could potentially escalate into a formal investigation.
Nvidia, holding a dominant position in the market with an 84% share, surpassing competitors like Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD), has been under the regulatory radar in several jurisdictions, including the EU, the United States, the UK, China, and South Korea. The company's chips, highly sought after for generative AI and accelerated computing tasks, are now at the center of the EU's latest probe.
Recently, the European Commission has been distributing questionnaires inquiring about Nvidia's sales tactics, specifically whether the company is commercially or technically tying its graphics processing unit (GPU) products. This line of questioning is separate from another set of inquiries related to Nvidia's attempt to acquire the artificial intelligence startup Run:ai.
The Commission is looking into how Nvidia markets its GPU products to different customers and if the contracts necessitate the purchase of networking equipment alongside GPUs. Despite the ongoing investigation, the European Commission has not provided any comments.
In response to the scrutiny, Nvidia has maintained that it fosters customer choice and competition based on the quality of its offerings. The company emphasizes that its products are independently strong and that it adheres to open industry standards, allowing for versatile use of its products across various configurations and system designs.
These questionnaires are typically part of the Commission's preliminary fact-finding steps, which may reinforce initial concerns about antitrust violations. Such infringements could result in penalties amounting to up to 10% of a firm's global annual revenue.
In a related development, the French antitrust authority is also examining Nvidia's practices and is reportedly preparing to levy charges against the company, according to sources earlier this year.
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