Nvidia AI chips are 'major bottleneck' but that doesn't mean regulatory action, EU says

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European Union competition chief Margrethe Vestager warned of a “major bottleneck” in Nvidia's supplies of AI chips, but said regulators had not yet decided whether to take any action.

“We are asking them questions, but it's preliminary,” she told Bloomberg during a visit to Singapore, which so far “doesn't meet the conditions for regulatory action.”

Nvidia has been attracting regulators' attention since it became the biggest beneficiary of the artificial intelligence spending boom. The company's graphics processing units, or GPUs, are prized by data center operators for their ability to crunch the massive amounts of information needed to develop AI models.

The chips have become one of the tech industry's hottest commodities, with cloud-computing providers competing with each other to get their hands on them. Demand for Nvidia's H100 processor units is so high that the company has outperformed rivals Intel Corp. and Advanced Micro Devices Inc., capturing an estimated 80% or more of the market share.

Despite the tight supply, Vestager said a secondary market in AI chip supplies could help foster innovation and fair competition.

But she said dominant companies could face certain restrictions on their actions in the future.

“When you have that kind of dominant position in the market, there are some things that a small business can't do,” she says, “but other than that, as long as you're doing your business and respecting it, you'll be OK.”

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