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AMD’s Former GPU Head Accuses Nvidia of Creating a ‘Cartel’ in Response to Reports of Delivery Delays as Retaliation

Following Groq’s allegations that Nvidia was holding up AI GPU orders for companies working with other processor suppliers for artificial intelligence applications, former AMD vice president Scott Herkelman said Nvidia was engaging in cartel-like practices.

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This happens more often than you think. NVIDIA does this with data center customers, OEMs, independent graphics card manufacturers, press and retailers. They learned their lesson from the GPP (GeForce Partner Program) and no longer put it in writing. They simply don’t ship what they ordered after the customer has placed the order. They represent the GPU cartel and control all supplies.

Herkelman’s accusations carry a lot of weight. He led AMD’s graphics division from 2016 until leaving in 2023, and the group competed with Nvidia in both the consumer and data center markets. Perhaps more importantly, from September 2012 to May 2015, he served as general manager of Nvidia’s GeForce division.

 

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A recent Wall Street Journal article shed light on allegations against Nvidia, alleging that the company is prone to delaying GPU shipments to data centers considering AI processors from competitors such as Groq. Jonathan Ross, CEO of Groq, suggested that this situation has created an atmosphere of secrecy among customers, with some even hiding and denying their contacts with competitors.

 

Nvidia CEO Jensen Huang has previously dismissed concerns about preferred supply, saying the company is committed to equitably distributing volumes and providing alternative solutions, such as leasing GPU capacity from cloud providers while customers wait for their orders to be filled. Tech giants like Amazon Web Services, Google and Microsoft are developing their own AI accelerators, but at the same time continue to actively purchase Nvidia chips, although they claim that they do not intend to directly compete with it. They are also among Nvidia’s largest customers, so they will likely continue to place orders.

 

Herkelman compared Nvidia’s tactics to its GeForce Partner Program, which caused an uproar in the industry in 2018 and a lot of negative publications, which ultimately forced Nvidia to close it. If the allegations against Nvidia are true, it also echoes the methods Intel previously used to pressure partners not to work with AMD products in the 1990s and 2000s. However, there is no concrete evidence of Nvidia’s alleged behavior in the said report. The situation calls into question the company’s practices, but in the absence of clear evidence, the case remains unresolved.

 

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