The chips have become one of the hottest commodities in the tech world. Image Credit: Shutterstock

European Union competition chief Margrethe Vestager warned of a “huge bottleneck” in Nvidia Corp. AI chips supply, but said watchdogs are still making up their minds about what, if anything to do about it.

“We’ve been asking them questions, but that is really preliminary,” she told Bloomberg during a trip to Singapore. That “would not” so far “tick the box of being regulatory action.”

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Nvidia has drawn the attention of regulators since becoming the biggest beneficiary of the artificial intelligence spending boom. Its graphics processing units “- or GPUs “- are prized by data center operators for their ability to crunch the massive amount of information required to develop AI models.

The chips have become one of the hottest commodities in the tech world, with cloud computing providers competing with one another to get access to them. Nvidia’s in demand H100 processing units have helped them gain a market share of above 80 per cent, according to estimates, ahead of rivals Intel Corp. and Advanced Micro Devices Inc.

Despite the supply squeeze, Vestager said that secondary markets in the supply of AI chips could help to spark innovation and fair competition.

But she said companies that are dominant could face certain restrictions on their behavior in the future.

“If you have that kind of dominant position in the marketplace, there are things that you cannot do that a small company can do,” she said. “But other than that, as long as you do your business and are respecting that, you’re good.”