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The U.S. Department of Justice (DoJ) reportedly sent Nvidia a subpoena as part of its ongoing investigation into its antitrust practices.
This move signifies a deepening inquiry into the chipmaker’s market behaviors following previous communications with the company.
Details of the Investigation:
According to Bloomberg News, the DoJ initially delivered questionnaires but has now escalated to legally binding requests for information from Nvidia. Other companies within the industry have also received subpoenas as part of the investigation.
Officials are particularly concerned that Nvidia’s practices may restrict competition by making it difficult for customers to switch to alternative suppliers and penalizing those who do not use its AI chips exclusively.
Nvidia’s Response:
In response to the subpoena, a spokesperson for Nvidia stated, “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” This assertion emphasizes the company’s belief in the competitive nature of its offerings.
Context of the Investigation:
The antitrust probe comes amid heightened scrutiny of AI-related companies, as investors reevaluate technology expectations amid concerns over slow returns on significant investments.
Last month, it was reported that the DoJ launched an investigation into Nvidia following competitors’ complaints regarding potential abuses of market dominance.
Regulatory Inquiries:
Nvidia has also indicated that it is facing requests for information from regulatory bodies in the U.S. and South Korea, specifically concerning its investments, partnerships, and dealings with other firms.
Additionally, inquiries have emerged from regulatory authorities in the European Union, the United Kingdom, and China.
Market Impact:
Following Nvidia’s latest quarterly forecast, which fell below investors’ projections, optimism surrounding AI investments has diminished.
The company’s stock declined 1.5% in after-hours trading on Tuesday, after a 9.5% drop during the regular session.
This resulted in a staggering $279 billion loss in market capitalization, marking the largest single-day loss for any company. Despite these recent setbacks, Nvidia’s shares have risen 141% so far this year, driven by the excitement around AI advancements.
