In a significant development, the French antitrust regulator is reportedly set to charge Nvidia, the world's largest computer chip maker, for alleged anti-competitive practices. This marks the first enforcement action against the company, according to sources familiar with the matter.

The charges stem from dawn raids conducted in September last year in the graphics cards sector, which specifically targeted Nvidia, as part of a broader investigation into cloud computing. Although the French authority has not officially commented on the matter, its so-called statement of objections or charge sheet is expected to be issued soon.

Nvidia's chips, widely used in artificial intelligence and computer graphics, have witnessed a surge in demand since the launch of the generative AI application, ChatGPT. As a result, regulatory scrutiny on the company has intensified on both sides of the Atlantic.

While Nvidia and the French authority declined to comment, it is worth noting that the company disclosed in a regulatory filing last year that it had received information requests from regulators in the European Union, China, and France regarding its graphic cards.

Furthermore, sources suggest that the European Commission is unlikely to expand its preliminary review at present, as the French authority is already investigating Nvidia. This indicates coordination between authorities in pursuing potential antitrust violations.

The recent report issued by the French watchdog highlights concerns regarding the sector's reliance on Nvidia's CUDA chip programming software, the sole system fully compatible with GPUs essential for accelerated computing. The watchdog also expresses unease over Nvidia's recent investments in AI-focused cloud service providers such as CoreWeave.

If found guilty of breaching French antitrust rules, companies face fines of up to 10% of their global annual turnover. However, it is important to note that concessions can be made by the accused companies to avoid or reduce penalties.

Meanwhile, in the United States, the investigation into Nvidia is being led by the Department of Justice, which is sharing the scrutiny of Big Tech companies with the Federal Trade Commission.

As the charging process unfolds, Nvidia will have to navigate mounting regulatory challenges both in France and the United States. The outcome of these investigations will have significant implications for the company's market position and future operations.

It remains to be seen how Nvidia responds to the charges and what steps it takes to address the antitrust concerns raised by the French regulator.