The European Commission has launched an in-depth investigation into Nvidia’s potential bundling of its hardware and software products, as it examines the company’s $700 million acquisition of the AI and machine learning firm, Run:ai. The European Union’s antitrust regulators are probing whether Nvidia has been offering discounts to customers who purchase its powerful graphics processing units (GPUs) alongside its GPU orchestration software, potentially strengthening its dominance in the GPU market.
According to a questionnaire reviewed by Reuters, the EU is scrutinizing Nvidia’s market practices in the GPU sector, where the company holds a commanding 84% market share. This far surpasses competitors such as Intel and AMD. Nvidia GPUs are widely used across various industries, including data centers, gaming, and even cryptocurrency mining, making them a critical component in high-performance computing.
The questionnaire from the European Commission poses crucial questions to Nvidia’s customers, probing whether bundling GPU orchestration software with hardware gives Nvidia a competitive edge in the market. Additionally, regulators are examining whether such bundling practices, coupled with discount offers, could undermine competition by locking in customers to Nvidia’s ecosystem.
While Nvidia has yet to receive formal complaints from customers, partners, or competitors, the company has commented on the pending acquisition. A spokesperson stated, “Run:ai currently supports only Nvidia GPUs, but once the regulatory process is complete, we plan to open-source Run:ai, making it available to all industry players.”
The European Commission, which acts as the EU’s competition watchdog, has expressed concerns about how this acquisition could impact competition in the broader technology market. The Commission has set a deadline of December 20, 2024, for its preliminary review of the deal.
As part of the investigation, the EU is asking Nvidia customers if they have been encouraged or required to purchase GPU orchestration software together with Nvidia hardware, potentially under the influence of discounts or incentives. The Commission is also investigating the potential effects of Nvidia open-sourcing Run:ai after the deal is finalized, and how such a move might impact the competitive landscape.
In the coming weeks, regulators will carefully evaluate how the Nvidia-Run:ai deal could reshape the future of GPU technologies, AI, and the broader high-performance computing industry. This review could have significant implications for Nvidia’s strategic position and the dynamics of the semiconductor market.
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