EU Competition Commissioner hints at Nvidia GPU probe, refers to 'huge bottleneck'

CUDA, woulda, shoulda be first port of call for AI slingers, but does it respect its own dominance?

The European Union's Competition Commissioner Margrethe Vestager reckons there is a "huge bottleneck" in the supply of Nvidia's GPUs - but her department has yet to make any decision on whether it needs to take regulatory action over this.

Vestager was speaking during an official visit to Singapore, and her words indicate that the European Commission has concerns about the dominant position that Nvidia holds in the market for AI accelerator silicon.

According to Bloomberg, the Competition Commissioner revealed that her department has already been involved in talks with the GPU supremo.

"We've been asking them questions, but that is really preliminary," she said, adding that nothing that has been discussed so far that would "tick the box of being regulatory action."

It isn't exactly clear what regulatory action the European Commission would take. Nvidia is arguably a monopoly player, with the California-based biz said to have an 88 percent share of the GPU market, according to recent figures from Jon Peddie Research, but by that measure, so is Intel with its CPUs.

Nvidia's newest products are in high demand, and there are conflicting accounts regarding whether or not there is a shortage of them. Earlier this year, HPE blamed its disappointing revenue in the first quarter on shortages of GPUs for AI servers, with CEO Antonio Neri claiming that lead times were upwards of 20 weeks, not only for Nvidia's then flagship H100 product, but also with previous generations.

TSMC, the Taiwan-based chipmaker which produces the actual silicon for Nvidia's products, warned last September that shortages were likely to last until the end of 2024.

However, morew recently analysts at TrendForce claimed the "tight supply" of Nvidia GPUs, which it claimed was largely due to a lack of capacity in TSMC's Chip-on-Wafer-on-Substrate (CoWoS) packaging technology rather than a shortage of the GPU chips themselves, had been addressed.

Any shortage would likely push up prices, and the European Commission is perhaps concerned that this might also allow Nvidia to play off companies in the supply chain against each other in a bidding war.

Earlier this year, analyst firm Omdia put out a report which explicitly claimed Nvidia is now a kingmaker in the server arena, and a close partnership with the GPU flinger would be vital for any vendor hoping to make gains in the server market.

Dell appears to be playing this game, as is server provider to the hyperscalers, Supermicro.

According to investor mag Barron's, Nvidia stock was "edging down" earlier today, as traders caught wind that regulators appear to be scrutinizing the GPU maker over its dominant position in AI accelerators.

It claimed that Nvidia has a strong case because "its success has been built on providing a superior product" rather than attempting to stifle competition. However, it also warned that the AI industry's reliance on Nvidia's CUDA software and the company's efforts to integrate technology such as networking with its AI kit looks to be causing "some disquiet" among competition authorities.

According to Bloomberg, Vestager said that secondary markets in the supply of AI chips might spark innovation and fair competition, but warned that companies that are dominant could face certain restrictions on their behavior in future.

"If you have that kind of dominant position in the marketplace, there are things that you cannot do that a small company can do," she said. "But other than that, as long as you do your business and are respecting that, you're good." ®

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