The European Commission has started questioning Nvidia (NVDA, Financial data) customers regarding possible discounts related to GPU software products sold with its graphics processing units, Reuters reported on Wednesday.
The investigation is part of an ongoing review of Nvidia’s planned $700 million purchase of Run:ai, a company focused on running AI chips most efficiently. This investigation could have more general effects on Nvidia’s position in the market for artificial intelligence technologies.
The investigation aims to assess Nvidia’s corporate policies, particularly with regard to possible anti-competitive effects. Announced in April, the purchase of Run:ai aims to enable more efficient AI workloads, strengthening Nvidia’s AI capability. operate:ai’s solution allows many workloads to run in parallel, perhaps reducing the need for GPUs and giving Nvidia a cost-effective advantage for AI developers.
Primarily for training large language models, a fundamental component of generative artificial intelligence systems, Nvidia has increased manufacturing of its H100 AI GPUs in recent months. These initiatives coincide with a global demand for artificial intelligence capabilities, of which Nvidia is an important supplier to large technology companies engaged in AI research like Alphabet (GOOGLE, Financial data) and Microsoft (MSFT, Financial data).
Driven primarily by the expansion of its data center business, Nvidia has also recently posted stellar financial results, with quarterly sales exceeding $16 billion. The company’s expertise in artificial intelligence hardware and software has made it a key supplier for companies moving to AI-based infrastructure and cloud service providers. Analysts have pointed out that Nvidia’s strong push into AI processors, as well as strategic acquisitions like Run:ai, are part of a broader attempt to maintain its competitive advantage over rivals, including Advanced Micro Devices (AMD, Financial data) and Intel (INTC, Financial data).
Although the European Commission’s investigative behavior suggests greater scrutiny, industry analysts believe Nvidia’s open source Run:ai approach will help ease regulatory concerns. If the purchase goes through, it would confirm Nvidia’s dominance in the artificial intelligence space, particularly in terms of tools allowing more affordable and easier access to AI development.
The outcome of the European Commission’s investigation could decide whether Nvidia faces legal difficulties in the future, but for now the company is focused on developing its AI capability in response to growing demand for solutions More powerful GPUs.
This article first appeared on GuruFocus.