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The US Department of Justice is examining chip giant Nvidia takeover of AI company Run under antitrust concerns.
The U.S. DOJ is investigating chip giant Nvidia’s (NVDA) buyout of AI startup Run on antitrust grounds, according to a report by Politico on Thursday. This investigation has caused a significant market reaction, with Nvidia shares falling over 3% in premarket trading on Friday, following a 6.7% drop at the end of Thursday’s session.
As reported by TechCrunch, Nvidia announced the acquisition of the Israeli firm Run in April for around $700 million. Run’s technology is known for enabling developers and teams to manage and optimize their artificial intelligence infrastructure, positioning it as a valuable asset for Nvidia’s expanding AI capabilities.
In response to the investigation, a Nvidia spokesperson stated, “We’ll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need.” The Justice Department has not yet responded to Reuters’ request for comment.
U.S. antitrust enforcers have been closely scrutinizing Big Tech acquisition activities due to concerns that the concentration of new technologies within a few major companies could stifle competition. This investigation is part of a broader effort to ensure that a few industry giants do not monopolize technological advancements and market power.
This isn’t the first time Nvidia has faced antitrust scrutiny. Last month, Reuters reported that the French antitrust regulator was preparing to charge Nvidia with alleged anti-competitive practices. This international attention highlights the global concerns regarding Nvidia’s market influence and business practices.
Despite the ongoing investigations, Nvidia’s profits and revenues have soared over the past year. The company’s processors have become the gold standard in the chip industry, primarily due to their capability to power AI applications, including training models like ChatGPT. This strong market position underscores the significance of the current antitrust investigations.
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