US Justice Department goes hard after Nvidia
The U.S. Department of Justice (DOJ) has expanded its investigation into Nvidia, a global leader in the AI chip market, for suspected violations of antitrust laws. The DOJ has already sent subpoenas to the company and other tech firms, compelling them to provide key information.
The investigation is focusing on practices that could limit competition and penalize customers who do not exclusively use Nvidia products. The move comes at a time when Nvidia $NVDA+5.0% is making record profits thanks to its dominance in artificial intelligence and facing increasing regulatory scrutiny.
Nvidia under scrutiny
Nvidia
NVDANvidia, a company best known for its graphics cards, has transformed itself into one of the most important players in the field of artificial intelligence in recent years. Its chips have become an indispensable part of the infrastructure for machine learning and other AI applications, giving the company a dominant position in the market. However, this rapid growth has not gone unnoticed by regulators, who are now investigating whether Nvidia is abusing its position to stifle competition.
As part of its investigation, the Department of Justice (DOJ) has sent subpoenas to Nvidia and other technology firms. These subpoenas are binding and the recipients must provide the necessary information. The move suggests that the DOJ may be close to filing a formal lawsuit.
Concerns about market monopolization
The investigation focuses on several key areas. The first is the possibility that Nvidia is making it difficult for its customers to switch to products from competing suppliers. According to sources close to the investigation, the DOJ is concerned that Nvidia may be providing benefits to those customers who commit to exclusive use of its chips, which could distort market competition.
The second area of concern is Nvidia's acquisition of RunAI, which it announced in April this year. RunAI specialises in AI computing power management software, and there are concerns that this acquisition could strengthen Nvidia's already strong market position and make it more difficult for competitors to gain access.
Nvidia is fighting back
Nvidia has responded to the investigation, arguing that its market dominance is a result of the quality of its products, which provide faster and more powerful solutions than competitors. "Nvidia is winning on its own merits, as evidenced by our results and the value to customers who can choose the solution that works best for them," the company said in a statement.
Jensen Huang, Nvidia's CEO, defended the accusations by saying it prioritizes customers who can use the company's products as they become available, a policy aimed at preventing stockpiling and accelerating AI adoption. Huang says this strategy is designed to meet the growing demand for AI technology, which is key to future developments in many industries.
Market impact and next steps
News of the investigation caused Nvidia shares to fall again following the disclosure, although overall they have more than doubled in value this year. This leaves Nvidia in a precarious situation where its success in the market is attracting not only investors but also the attention of regulators.
Analysts predict that if the DOJ files a formal lawsuit, it could have far-reaching implications for the entire technology sector, which depends heavily on Nvidia chips. Microsoft and Meta, for example, spend more than 40% of their hardware budgets on Nvidia technology, making the company a key player in their supply chain.
With the growing role of AI in the global economy, there is increasing pressure to ensure fair competition in this sector. The Nvidia investigation could thus be a precursor to a broader regulatory intervention to ensure that access to these critical technologies is not dominated by a single dominant player.
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