Wednesday, February 28th 2024
NVIDIA Accused of Acting as "GPU Cartel" and Controlling Supply
World's most important fuel of the AI frenzy, NVIDIA, is facing accusations of acting as a "GPU cartel" and controlling supply in the data center market, according to statements made by executives at rival chipmaker Groq and former AMD executive Scott Herkelman. In an interview with the Wall Street Journal, Groq CEO Jonathan Ross alleged that some of NVIDIA's data center customers are afraid to even meet with rival AI chipmakers out of fear that NVIDIA will retaliate by delaying shipments of already ordered GPUs. This is despite NVIDIA's claims that it is trying to allocate supply fairly during global shortages. "This happens more than you expect, NVIDIA does this with DC customers, OEMs, AIBs, press, and resellers. They learned from GPP to not put it into writing. They just don't ship after a customer has ordered. They are the GPU cartel, and they control all supply," said former Senior Vice President and General Manager at AMD Radeon, Scott Herkelman, in response to the accusations on X/Twitter.
The comments reference the NVIDIA GeForce Partner Program (GPP) from 2018, which was abandoned following backlash over its exclusivity requirements. Herkelman suggests NVIDIA has continued similar practices but avoided written agreements. The Wall Street Journal report also hinted that major tech companies like Microsoft, Google, and Amazon are developing their own AI accelerators but downplaying them as NVIDIA competitors. This further points to an environment where NVIDIA is seen as controlling access to key technology for AI development. NVIDIA currently powers around 80% of AI development worldwide, giving it incredible influence over strategic technology. The accusations from Groq and Herkelman suggest the company is willing to leverage that market position aggressively to protect its dominance. NVIDIA has not officially responded to the latest accusations. But the reports have fueled speculation about anticompetitive practices just as regulatory scrutiny grows over the market power of tech giants. NVIDIA will likely face pressure to transparently address whether its supply allocation favors some customers over others based on relationships with rival chipmakers.
Sources:
The Wall Street Journal, Scott Herkelman (X/Twitter), via VideoCardz
130 Comments on NVIDIA Accused of Acting as "GPU Cartel" and Controlling Supply
Nvidia is imo going to do very well in the short term, but the AI market is going to saturate itself very fast imo. ARM, AMD, Intel, everyone is in fifth gear to make AI, and not everyone needs the best AI chips out there for their use case. Nvidia will probably crash hard stock wise at the end of 2025.
1. Nvidia competes with much smaller chips. AD104 measures around 294 mm2 and yet in manages to perform the same as the Navi 31 529 mm2 in Radeon RX 7900 GRE.
Can you imagine how much the larger chip increases the cost and decreases the profit margin?
I assure you want to be an Nvidia shareholder, no an AMD shareholder.
www.techpowerup.com/gpu-specs/geforce-rtx-4070-super.c4186
2. AMD always leaves imperfections with their implementations - high power consumption (media playback, idle, power spikes, etc.), and lower than usual performance in certain games (Counter-Strike 2 as a prime case), and lack of interest to put more efforts in the ray-tracing development where it lags a few years behind Nvidia's solution.
3. Always skipping the largest chips. Radeon RX 5700 XT, Radeon RX 8700 XT, Radeon Vega 64, to name a few.We shall see.
And Scott Herkelman is pathological liar.
www.techpowerup.com/319371/amd-tightly-regulating-prices-of-successful-radeon-rx-6750-gre-in-china
videocardz.com/newz/asrock-does-not-rule-out-making-nvidia-cards-but-describes-it-as-challenging-at-present
After all, Nvidia is widely supported and hardly anyone pushes back on their anti-competitive practices. Now in a dominant AI GPU producer position, no companies or nations will want to end up in their bad book. Mark of a true monopoly. So is this news surprising? Hardly. But Nvidia supports will continue to blindly support them to no benefit or even detrimental for them.To be honest, whenever a company grows too big, it is unavoidable for them to operate in an anti-competitive way to fend off competitors. That is the unfortunate fact. Take Intel for example, it is clear they are likely still at it with the anti-competitive practice. If you just look across laptops for example, notice that most premium laptops are exclusive to Intel chips only? AMD processors rarely get the "red carpet" treatment and even if the same model exists, the specs may also be inferior to the Intel version. One can argue that AMD may not be able to supply that many chips as compared to Intel, but I do wonder if high end laptops really sell like hot cakes.
It's all good, kids these days won't put two and two together.
They get in trouble, get a slap on the wrist, nothing really changes and the slap is absorbed pretty much instantly.
There, I fixed it. It's not really news.
The little guys being intimidated by Nvidia here are conglomerates themselves who use the same tactic on a daily basis
NVIDIA maybe is a cartel, but an honest one.