In a significant development, the U.S. Department of Justice (DOJ) has initiated an antitrust investigation into Nvidia, following accusations from competitors of potentially monopolistic behavior in the AI chip market.
The inquiry focuses on whether Nvidia has exerted undue pressure on cloud service providers to purchase multiple Nvidia products. Furthermore, investigators are examining claims that Nvidia imposes higher charges for networking equipment if customers opt to buy AI chips from rival companies like AMD and Intel.
This scrutiny comes as Nvidia maintains a commanding 80% share of the AI chip sector. The company’s shares saw a 3.6% drop in premarket trading on Friday amid the unfolding investigation.
Nvidia has yet to comment directly on the probe but has pledged full cooperation with regulators. A spokesperson for the company emphasized Nvidia’s commitment to competition driven by extensive investment and innovation, asserting that Nvidia products are accessible across all cloud platforms and on-premises setups, offering customers the freedom to choose the best solutions for their needs.
The DOJ has not provided an immediate response to requests for comments. Investigators are actively seeking additional information from several of Nvidia’s competitors.
The investigation has garnered support from U.S. progressive groups and Democratic Senator Elizabeth Warren, who have called for increased scrutiny of Nvidia’s market practices. These groups, which advocate against monopolistic practices and for greater regulatory oversight of technology firms, have raised concerns over Nvidia’s bundling of software and hardware. French antitrust authorities are also reportedly considering similar charges.
