Update 05/09/2024 by Martijn van Best: According to a spokesperson for Nvidia, the company has not received a subpoena from the US Department of Justice at all. That department has itself not yet commented on the matter, Reuters reports.
“We have inquired with the U.S. Department of Justice and have not been subpoenaed. Nonetheless, we are happy to answer any questions regulators may have about our business”, the Nvidia spokesperson said.
However, the Justice department did raise questions with Nvidia and other tech companies about an ongoing probe into monopoly practices.
Original article 04/09/2024: The US Department of Justice is taking its antitrust probe into Nvidia to the next level. This is because it suspects that the chip and AI giant is increasingly guilty of monopoly practices.
The Department of Justice (DoJ) has reportedly stepped up the preliminary investigation because it has gotten the impression that Nvidia is increasingly engaging in monopoly practices. Other regulators share this opinion.
The department has now issued subpoenas to Nvidia to gather evidence of these practices, Bloomberg writes. These could, for example, require the company to provide more insight into its business practices.
Handing out rewards and punishments
Nvidia has come under fire for possible monopoly practices. The company would make it increasingly difficult for customers to use competitors’ products. Customers who do so would be punished by the chip giant, for example, by having to wait longer for products.
Earlier, in an earnings call, Nvidia supposedly admitted to prioritizing customers who have the necessary data center capacity for its products so that the hardware can be used immediately. The company would also favor customers who exclusively use Nvidia’s products by offering them more attractive pricing and faster delivery. Other rumors are that Nvidia is trying to prioritize the delivery of its well-known GPUs and accelerators to providers of well-known AI services.
Nvidia denies wrongdoing
Nvidia itself denies the allegations about its alleged monopolistic practices. According to the company, its success is entirely explained by its superior products.
The US DoJ case is not the only competition case facing Nvidia. Last September, French authorities raided the company’s French offices to investigate the dealings surrounding its GPUs. This was part of a larger investigation into cloud computing. The acquisition of Israeli startup Run: AI is also under scrutiny, as it would further increase the company’s market domination.
Besides the subpoenas, there is more bad news for Nvidia: its stock market value fell 9.5 percent yesterday, amounting to 279 billion dollars (252 billion euros) in lost market capitalisation. This is the biggest loss on the US stock market in a single trading day, Reuters reported. Despite the company’s good quarterly figures, investors feel results are disappointing, which could be a harbinger of an impending implosion of the AI hype.
Also read: French offices of Nvidia raided by antitrust authority.