Nvidia Subpoenaed by U.S. DoJ in Antitrust Probe

The U.S. Department of Justice (DoJ) has escalated its ongoing antitrust investigation into Nvidia by issuing a subpoena, Bloomberg News reported. The move comes after earlier questionnaires were sent to Nvidia and other companies involved in the AI chip market. Sources familiar with the probe have revealed that these legally binding subpoenas signal a more intense focus on Nvidia’s practices.

Concerns Over Market Practices

Authorities are reportedly investigating whether Nvidia is making it harder for customers to switch to other chip suppliers and whether it penalizes buyers who do not exclusively use its AI chips. These concerns arise as the company dominates the market for artificial intelligence hardware, raising questions about potential anticompetitive behavior.

In response, an Nvidia spokesperson defended the company’s business practices, saying, “Nvidia wins on merit, as demonstrated by our benchmark results and the value we deliver to customers, who can choose whatever solution is best for them.”

Previous Complaints and Competitor Concerns

This subpoena follows a report last month by The Information that the DoJ had launched an investigation into Nvidia after receiving complaints from competitors. These companies alleged that Nvidia had leveraged its market dominance to stifle competition, prompting regulatory scrutiny.

Broader Regulatory Pressure

In addition to the DoJ’s investigation, Nvidia has confirmed it is responding to inquiries from other global regulators, including those in South Korea, the European Union, the UK, and China. These requests for information focus on the company’s partnerships, investments, and agreements, signaling a growing regulatory interest in Nvidia’s business operations worldwide.

Market Impact and AI Investor Sentiment

The subpoena comes at a critical moment for Nvidia and other AI-related companies, as investor sentiment around AI technology has begun to waver. Nvidia’s latest quarterly forecast fell short of investor expectations, dampening optimism around the long-term profitability of AI investments.

On Tuesday, Nvidia’s shares dropped by 9.5% in regular trading, marking a historic one-day loss that wiped $279 billion from its market capitalization. Shares fell another 1.5% in after-hours trading on Tuesday, marking a 11% total loss. Despite these setbacks, Nvidia’s stock has still risen by 141% this year, largely fueled by enthusiasm over AI developments.

Potential Opening for New Competitors

While Nvidia remains the dominant player in the AI chip market, this investigation could provide an opening for new competitors, such as Sam Altman’s rumored chip venture. As the probe continues, the landscape of AI hardware competition may shift, introducing new opportunities for rival companies.