Former GeForce Manager calls Nvidia a “GPU cartel” that “control all supply”

Nvidia called a “GPU Cartel” by former manager as rival firm alleges order delays for those seeking alternative hardware

Nvidia has been accused of GPU orders for customers who seek out alternative, non-Nvidia, hardware options. A report from the Wall Street Journal, has alleged that Nvidia’s AI customers a fearful of retaliatory shipment delays, if they seek to purchase or develop AI hardware. These allegations come from Groq CEO Jonathan Ross, the head of a rival AI company. This had lead a former Nvidia manager to call the company a “GPU cartel”.

In response to an article about these allegations on Tom’s Hardware, Scott Herkelman, Nvidia former GeForce General Manager said “this happens more than you expect”. “Nvidia does this with DC (Data Center) customers”, Herkelman states, “They Don’t just ship after a customer has ordered”. Scott even went as far as to call Nvidia a “GPU cartel” stating that they “control all supply”.

Scott Herkelman has previously worked for both AMD and Nvidia. He worked for AMD as General Manager of AMD’s Graphics Business Unit until December 2023. As such, Scott has experience working for Nvidia and working as a rival to Nvidia.

Customers need to meet with Nvidia rivals in secret, allegedly

Groq CEO Jonathan Ross has stated to the Wall Street Journal that customers often meet with Nvidia rivals in secret to prevent retaliatory order delays. Nvidia are allegedly delaying orders for those who seek alternative hardware. In a sense, Nvidia are reportedly punishing customers for not being loyal to them.

A lot of people that we meet with say that if Nvidia were to hear that we were meeting, they would disavow it. The problem is you have to pay Nvidia a year in advance, and you may get your hardware in a year, or it may take longer, and it’s, “Aw shucks, you’re buying from someone else, and I guess it’s going to take a little longer.”

Demand for Nvidia hardware is sky high. The explosion in demand for AI hardware has seen Nvidia’s sales increase immensely. Nvidia does not want their customers to seek rival hardware from AMD or other chipmakers. Every major company wants to jump on the AI bandwagon, and for that they need AI hardware. Right now, Nvidia is the biggest AI chipmaker, and delays to Nvidia hardware orders can have huge consequences to customers. If Nvidia delays your order, your company is placed at a disadvantage.

Nvidia, the “GPU Cartel”

Right now, there is no hard evidence that Nvidia are using underhanded tactics to harm their competitors. We have the words of a would-be Nvidia competitor and the word of a former GeForce manager that hasn’t been part of Nvidia for almost a decade. There is no proof that Nvidia has done anything wrong, or that they are strong-arming their customers. As it stands, Nvidia are the leaders of the AI market, and it makes sense for companies to desire their hardware over competing products.

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Mark Campbell

Mark Campbell

A Northern Irish father, husband, and techie that works to turn tea and coffee into articles when he isn’t painting his extensive minis collection or using things to make other things.

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