Portugal’s Competition Authority (AdC) has warned that the global supply chain for artificial intelligence chips could create competition risks that may limit access to critical computing resources needed to develop advanced AI systems.

In a new policy paper examining competition in the generative AI ecosystem, the regulator highlights how access to specialized chips used to train and run AI models has become a central factor shaping innovation and market power in the AI industry. The analysis focuses on structural dynamics within the AI chip value chain, including design, manufacturing, and cloud-based deployment.

According to the AdC, the production of AI chips depends on a complex global supply chain that is highly concentrated among a small number of firms. The regulator notes that significant economies of scale, high capital costs, and technical complexity have created barriers that make entry into the sector difficult for new competitors. These structural factors can lead to supply rigidity and rising chip prices, potentially limiting access for startups and smaller AI developers seeking to train and deploy advanced models.

The paper also highlights growing vertical integration across the AI ecosystem. Leading chip designers and cloud computing providers are increasingly building integrated platforms that combine hardware, software, and services. The AdC warns that these ecosystems could strengthen technological dependence and reduce interoperability across competing systems.

One example cited is NVIDIA’s CUDA development platform, which has become widely adopted by developers and researchers. The authority notes that network effects tied to such platforms may reinforce the company’s position in the AI chip market and make it harder for competitors to gain traction.

The report also discusses the role of public high-performance computing (HPC) infrastructure as a potential way to ease supply constraints. However, the AdC stresses that the pro-competitive benefits of public computing resources depend on transparent and non-discriminatory access rules.

The new paper is part of the AdC’s ongoing examination of generative AI markets. Previous analyses have explored issues related to data access, open AI models, and labor market impacts, as regulators seek to identify emerging risks in rapidly evolving digital markets.

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