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Nvidia's dirty deeds done dirt cheap

by on28 February 2024

GPU cartel allegations

Nvidia has been accused of holding back orders of AI GPUs to customers who are seeing other suppliers.

The allegations come from a former AMD vice president has called Team Green "the GPU cartel."

The Wall Street Journal published a report claiming that Nvidia could hold back data centre GPU orders to firms meeting with rival AI accelerator firms.

Hardware startup Groq, which makes AI chips for LLM inference, said Nvidia customers have to be sneaky about getting or ordering AI acceleration tech if Nvidia decides to hold back their orders as revenge.

Groq boss Jonathan Ross said that many people say that if Nvidia were to hear that we were meeting, they would deny it.

"The problem is you have to pay Nvidia a year in advance, and you may get your kit in a year, or it may take longer, and it's, 'Oh dear, you're buying from someone else, and I guess it's going to take a bit longer.'"

It's not just Groq making these claims. Former AMD vice president Scott Herkelman replied to a Tom's Hardware post on X with

"This happens more than you think, Nvidia does this with DC data centre customers, OEMs, AIBs, press, and sellers."

"They learned from GPP not to put it in writing. They do not ship after a customer has ordered. They are the GPU cartel, and they control all supply."

Herkelman knows more than most about the graphics industry's two most prominent players. Before running Team Red's graphics division from 2016 to 2023, he was the boss of Nvidia's GeForce business between September 2012 and May 2015.

During Nvidia's recent earnings call, boss Huang talked about the issue of how its AI chips are given out to avoid customers getting more than they need or moving to rival products.

"We give out fairly. We do our best to give out fairly and avoid too much," he said.

Nvidia CFO Colette Kress said that Nvidia expects its next-generation products (i.e., Blackwell) to be short of supply due to demand being more than supply.

Some might say this is just a case of rivals being jealous of Nvidia's success - the firm's total earnings of €20.4 billion for the quarter marked a 265 per cent YoY rise, pushing Huang to 21st place on Bloomberg's Billionaires Index, but this isn't the first time Nvidia has been accused of dodgy tactics.

In 2018, Nvidia's GeForce Partner Programme (GPP) was set up to work closer with OEMs and add-in board (AIB) partners on new products, product launches, and marketing. However, the programme was unfair and harmful to customers, hurting both customer choices and partners' ability to do business with rivals like AMD and Intel. Nvidia was eventually forced to scrap GPP.

In 2020, Nvidia told YouTube channel Hardware Unboxed that it would stop giving GeForce Founders Edition review units. The reason was that presenters Steve Walton and Tim Schiesser did not focus enough on its graphics cards' RTX ray tracing features.

Nvidia eventually apologised and changed its decision, but this only came after a wave of public anger against the tech giant.


Last modified on 28 February 2024
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