Wednesday, February 28th 2024

NVIDIA Accused of Acting as "GPU Cartel" and Controlling Supply

Feb 28th, 2024 02:24 Discuss (130 Comments)

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

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130 Comments on NVIDIA Accused of Acting as "GPU Cartel" and Controlling Supply

#101

evernessince

ZoneDymoidk why this deserved to be posted, what a bunch of nonsense and nothing.

There's a Washington Street Journal article where more of Nvidia's AI customers voice their concerns: www.wsj.com/tech/ai/nvidia-ceo-jensen-huang-vision-company-f05db212

It's really nothing new for Nvidia though, they've pulled these allocation games with their board partners on numerous occasions. The only difference is that regulators can step in before Nvidia gets it's boot on the throat of another market. They will undoubtedly do everything in their power to hamper competition and maximize profits.

#102

LabRat 891

evernessinceThere's a Washington Street Journal article where more of Nvidia's AI customers voice their concerns: www.wsj.com/tech/ai/nvidia-ceo-jensen-huang-vision-company-f05db212

A big MSM source like WSJ publishing on this controversy, about the same timeframe? Interesting.

Kinda looking like King Green McLeatherJacket is either about to be very displeased, or is in on the charades. :laugh:
No "conspiracy", this just seems to be how things work nowadays:
Big or Small, companies and individuals alike, utilize media and media influencers strategically, to impact markets, investments, and sponsorships.
TBTF, it's what used to happen organically, now merely tailored and engineered for profit :ohwell:

Either way, *this growing topic, overall* along with the AI/MI market-demand surging-
(inclu. 'Chip Manufacturers' internationally appealing for grants, taxpaid funding/subsidies, and other resource prioritizations/reallocations)
-means "moving and shaking" going on in 'the chips' industry, worldwide. Market Disruptions and entrance-openings for Market Disruptors to enter. New Players, and New Technologies.

We live in interesting times, and it may not be in the worst way (for once).

#103

Tek-Check

lexluthermiesterYou're citing Hardware Unboxed? Really?!? That alone is embarrassing for you.. Steve Walton is incompetent and a known sellout. Nothing he presents can be trusted. LTT is a better source of benchmark data...

LTT? We remember their big public Mea Culpa from a few months ago, precisely because benchmarks were dismal.

When one company dominates a segment of market, such as AI data center, it's not surprising to hear news about cartel-like practices. It's very tempring to use own position and play with products, prices and delivery on your own terms.

#104

LabRat 891

Tek-CheckLTT? We remember their big public Mea Culpa from a few months ago, precisely because benchmarks were dismal.

bretty sure, That was his point. :oops:

LTT is a well-known low-reliability source. It was a point of reference.
It kinda looks like HWunboxed is on the same level as The Verge is, in his book.

TBQH, I don't disagree.
Personally, I look @ sources like those, kinda like I do Aliexpress purchases. With:
-greatly lowered expectations.
-expectations of inaccuracies.
NGL, If the topic is hard-to-find and/or the B-roll is good, I might watch/read :laugh:

Tek-CheckWhen one company dominates a segment of market, such as AI data center, it's not surprising to hear news about cartel-like practices.

Sadly, I can't help but agree.
IMO, It's more-notable that it's being called out, and propagated in media, than the practice/action itself is.

Tek-CheckIt's very tempring to use own position and play with products, prices and delivery on your own terms.

Being Real: AMD 'fans' and nVidia 'fans' alike, can only work from what they know...

Personally, I feel that nVidia (successfully) takes advantage of their fanbase (moreso than AMD); ala Apple. OtoH in this day and age, it's (seemingly) strictly business; our individual feelings, morals, and ethics (apparently) weigh very little in the balance.

#105

lexluthermiester

Tek-CheckLTT? We remember their big public Mea Culpa from a few months ago, precisely because benchmarks were dismal.

Again, the point I was trying to make might have been too subtle. My apologies for trying to be clever...

LabRat 891Pretty sure, That was his point. :oops:

Yup, it sure was. Seems to have gone overhead like a Blackbird at Mach 4..

LabRat 891No excuses for nVidia but, I gotta wonder what prompted bringing this up?

Oh that's easy, look at EVGA. That effectively sums it up quite well. NVidia has a strangle hold on the market, which some would argue isn't just unfair and cut-throat, but also potentially unlawful.

There are very serious hints at anti-trust violations being displayed by NVidia.

#106

nguyen

evernessince50-70% seems extremely reasonable compared to the 3-5x claims Nvidia was making. I can't wait to see your proportionality greater outrage at Nvidia because as we are all aware, you treat both equally.

Nvidia marketing say lots of BS too, but they did not lie by omission about RTX 4000 rasterization performance in non RT games.

R-T-Bnot only that but his charts are showing up to 50-70% gain as claimed so I really don't understand how he thinks this is some kind of mythbuster...

One can compare the slides when 6900XT was launched vs 7900XTX

Weird that when Scott was confident, he didn't need to lie by omission huh.

Pretty much every reviewer came out of the 7900XTX announcement expecting it to be faster than it really is, including W1zzard reviews

Averaged over our whole 25-game test suite at 4K resolution, with RT off, we find the Radeon RX 7900 XTX 4% faster than the GeForce RTX 4080. While that definitely falls short of AMD's own projections, it's still a tremendous result

Scott Herkelman really lied for no reason at all, since every one would know how 7900XTX perform anyways, imagine now he's lying again because his new company can't sell chips :rolleyes:

#107

lexluthermiester

nguyenNvidia marketing say lots of BS too, but they did not lie by omission about RTX 4000 rasterization performance in non RT games.

One can compare the slides when 6900XT was launched vs 7900XTX

Weird that when Scott was confident, he didn't need to lie by omission huh

If anyone consider what Scott said was accurate, then I can say 4090 is up to 4x the RT performance of 7900XTX in a few cherry picked games without needing to elaborate further

Who are you trying to convince? The nonsense being displayed by you comes off as little more than silly blatherskite. Just stop. We've already proven you and your friend wrong.

#108

john_

Nvidia is in a peculiar position where it controls everything and gets away with everything. Even with the burn up problems of the 16 pin we seen a video from Gamers Nexus being enough to convince everyone that it was a user error and while this case involves a product catching fire, Nvidia wasn't forced to do a recall of the cards. We see cable and adapter manufacturers doing a recall and Nvidia got away with it while the problem is in fact sitting on the card itself.

On the other hand when there is something.... not great with AMD and it's products or when a negative rumor is spread about AMD, there are earthquakes around the internet with tech channels and youtubers rushing to prove that they are independent, ready to publish the ugly truth, show no fear towards the "multi billion" AMD.

AMD was always their proof that they fear none (while they are constantly sh!__!ng their pants when they have to sugar coat something not favorable about Nvidia).

#109

Tek-Check

lexluthermiesterAgain, the point I was trying to make might have been too subtle. My apologies for trying to be clever...

As you know, we don't have one and only objective standard for testing. It's impossible, which is fine. I find 3DCenter's attempt at this interesting. They publish meta-analysis of all reviews. Not ideal, of course, but this approach tones down any extremes from individual reviews obtained on specific systems.

lexluthermiesterOh that's easy, look at EVGA. That effectively sums it up quite well. NVidia has a strangle hold on the market, which some would argue isn't just unfair and cut-throat, but also potentially unlawful.
There are very serious hints at anti-trust violations being displayed by NVidia.

Agreed.

#110

ChuzzWuzza

Let's hope Intel get there S$#@ together and actually become a real contender. It will concentrate minds in both the green and red camp, but I don't expect anything in the near future.

#111

Denver

john_Nvidia is in a peculiar position where it controls everything and gets away with everything. Even with the burn up problems of the 16 pin we seen a video from Gamers Nexus being enough to convince everyone that it was a user error and while this case involves a product catching fire, Nvidia wasn't forced to do a recall of the cards. We see cable and adapter manufacturers doing a recall and Nvidia got away with it while the problem is in fact sitting on the card itself.

On the other hand when there is something.... not great with AMD and it's products or when a negative rumor is spread about AMD, there are earthquakes around the internet with tech channels and youtubers rushing to prove that they are independent, ready to publish the ugly truth, show no fear towards the "multi billion" AMD.

AMD was always their proof that they fear none (while they are constantly sh!__!ng their pants when they have to sugar coat something not favorable about Nvidia).

They don't want to lose tens of thousands in marketing dollars or miss out on receiving products at launch. Anyone who says that's not how it works is a blind and compulsive liar.

#112

Noyand

john_Nvidia is in a peculiar position where it controls everything and gets away with everything. Even with the burn up problems of the 16 pin we seen a video from Gamers Nexus being enough to convince everyone that it was a user error and while this case involves a product catching fire, Nvidia wasn't forced to do a recall of the cards. We see cable and adapter manufacturers doing a recall and Nvidia got away with it while the problem is in fact sitting on the card itself.

On the other hand when there is something.... not great with AMD and it's products or when a negative rumor is spread about AMD, there are earthquakes around the internet with tech channels and youtubers rushing to prove that they are independent, ready to publish the ugly truth, show no fear towards the "multi billion" AMD.

AMD was always their proof that they fear none (while they are constantly sh!__!ng their pants when they have to sugar coat something not favorable about Nvidia).

From what I read, Nvidia "won" on a "technicality". The connector works well in ideal condition, but said ideal condition is not always reached since that connector lack a clear user feedback when it's properly seated, and doesn't handle tight angle well. But the salt on the wound is that some companies also made poorly designed cable/adapter for a connector that's already tricky to begin with. We're talking adapters that don't even plug all the way in, even if you push on them with all your strength.

Another salt to the wound is that some AIC don't want to use the redesigned connector :
www.tomshardware.com/pc-components/gpus/not-all-rtx-40-series-super-gpus-use-the-new-12v-2x6-connector-new-images-of-16-pin-h-power-connector-emerge

The surprising thing is that this connector is also used on their 40 000$ H100 datacenter GPU, that companies are buying left and right... I would have thought that the datacenter wouldn't be so bleeding edge and just keep using the EPS until something foolproof came around. But nope, and if datacenters burned down because of that, they did a great job at keeping it on the low.

#113

evernessince

lexluthermiesterOh that's easy, look at EVGA. That effectively sums it up quite well. NVidia has a strangle hold on the market, which some would argue isn't just unfair and cut-throat, but also potentially unlawful.

There are very serious hints at anti-trust violations being displayed by NVidia.

EVGA, XFX, and BFG at this point. It wouldn't be the first time a company that relies on Nvidia for their profits decides that not dealing with Nvidia is worth the loss of all or most of their income.

#114

Hxx

evernessinceEVGA, XFX, and BFG at this point. It wouldn't be the first time a company that relies on Nvidia for their profits decides that not dealing with Nvidia is worth the loss of all or most of their income.

Yeah assuming you meant sales/revenue because I doubt Evga made any significant income from gpu sales outside of maybe the pandemic

#115

remekra

evernessinceEVGA, XFX, and BFG at this point. It wouldn't be the first time a company that relies on Nvidia for their profits decides that not dealing with Nvidia is worth the loss of all or most of their income.

Forgot that XFX also made nvidia cards back in the day, and forgot that BFG existed.

AMD should do all in it's power to attract EVGA to make Radeons, lost opportunity or maybe we will see some in the future.

#116

evernessince

HxxYeah assuming you meant sales/revenue because I doubt Evga made any significant income from gpu sales outside of maybe the pandemic

I'd assume GPUs were EVGA's primary source of income given they were the top selling Nvidia AIB by far. They managed to grow as a company to different areas as a company but without their GPU income they've pretty much stopped most operations. Their rollout of new products has greatly declined unfortunately.

#117

john_

remekraAMD should do all in it's power to attract EVGA to make Radeons, lost opportunity or maybe we will see some in the future.

I doubt EVGA would be interested in that, until AMD presents GPUs that can challenge Nvidia's directly. EVGA is a company that creates hype around it's name as being top, hardcore, enthusiast option. You can't do that with an RX 7900XTX that gets butchered in RT performance by more than one Nvidia models.

#118

kapone32

All I will say is there is only one reason ATI survived when Nvidia ate all of it's competition. Now they have people talking about raster like it is not important. The most insane argument is telling people that you are wasting time getting a 7900XT when the 4070TI has DLSS. The fact remains that a small percentage of Games support DLSS and the current driver from AMD makes the argument moot.

Even after all of that there will still be people that will tell me that I am talking crap. EVGA has been replaced with Founders Edition and the AIBs have to price their cards much higher than the Founders cards to make a decent profit.

Then we look at their numbers. Many people like to say 91% market share in Gaming like that is the truth. When the US Govt announced that China could not buy 4090s what did they do. Pump their Asian partners that sell to China with 4090s. Last time I looked 4090s are included as Gaming GPUs

The issue is that Nvidia are a strong part of the narrative. The same way how Bulldozer was maligned in the days of 60Hz panels when CPUs made no real difference in Gaming performance. Now we have people telling us how bad AMD cards are when the 7900XT is more than 50% less in cost and plenty for 4K but since it is not as fast as a 4090 it is no good.

Do we remember when HUB went fly fishing in the Indian Ocean, he had uploaded a review of an Nvidia card that did not paint a rosy picture. Well Nvidia threatened to cut them off and in months he became a staunch supporter of DLSS.

#119

remekra

john_I doubt EVGA would be interested in that, until AMD presents GPUs that can challenge Nvidia's directly. EVGA is a company that creates hype around it's name as being top, hardcore, enthusiast option. You can't do that with an RX 7900XTX that gets butchered in RT performance by more than one Nvidia models.

Of course they could do hardcore model of 7900XTX. AMD should give them 600W BIOS, put a big ass cooler on it, call it 3GHz edition and see it rip. RDNA3 OCes very well, provided you give it enough power.
Besides there is nothing hardcore, top or enthusiast about RTX 3060 XC Gaming, yet they were making it.

#120

the54thvoid

Intoxicated Moderator

This thread has multiple personality disorder. If it wasn't a news post, I'd shut it down, lock it in a box, and ditch it at sea.

I'd say stay on topic, but I doubt that would work. Maybe warning points would?

#121

ThrashZone

Hi,
Tough to post thread and use language like this one has and not expect anything other than what has happened hehe

But for the advancements nvidia has made is pretty much what the title insinuates like it or not.

#122

vacsati

Rival flaming Nvidia....what a surprise... :D

#123

lexluthermiester

vacsatiRival flaming Nvidia....what a surprise... :D

Right? Don't get me wrong, NVidia could be in violation of the law, Anti-Trust laws spring to mind. However, the fanboy rival flaming is childish..

#124

Geofrancis

people keep missing the point of the article, its nothing to do with features or anything like that the issue is "afraid to even meet with rival AI chipmakers out of fear that NVIDIA will retaliate by delaying shipments of already ordered GPUs." this is exactly what intel done to AMD with CPUs and it almost put them out of business.

#125

nguyen

Geofrancispeople keep missing the point of the article, its nothing to do with features or anything like that the issue is "afraid to even meet with rival AI chipmakers out of fear that NVIDIA will retaliate by delaying shipments of already ordered GPUs." this is exactly what intel done to AMD with CPUs and it almost put them out of business.

Weird that AMD made a come back with Ryzen and is now worth more than Intel eh.

Making shitty products that don't sell then accusing competitor for being monopoly is kinda lame anyways.

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NVIDIA Accused of Acting as "GPU Cartel" and Controlling Supply

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