The U.S. Department of Justice (DoJ) has issued a subpoena to Nvidia, intensifying its antitrust investigation into the AI chipmaker, according to Bloomberg News. This move follows earlier inquiries where the DoJ had sent questionnaires, and now it has escalated to legally binding requests. The investigation extends beyond Nvidia, with other companies also reportedly receiving subpoenas.
Officials are examining Nvidia’s practices, concerned that the company may be restricting competition by making it difficult for customers to switch to other suppliers. There are also allegations that Nvidia penalizes clients who do not exclusively use its AI chips. A spokesperson for Nvidia defended the company, stating that it competes based on merit, emphasizing its benchmark performance and the value it provides to customers.
This subpoena adds to ongoing regulatory scrutiny of Nvidia, which faces inquiries from authorities not only in the United States but also in South Korea, the European Union, the United Kingdom, and China. Last month, it was reported that the DoJ had initiated a formal investigation into Nvidia following complaints from competitors about potential abuses of its dominant market position.
The timing of this legal scrutiny is sensitive, coming as investor enthusiasm for AI companies wanes due to concerns about the slow financial returns from substantial investments in AI technologies. Nvidia’s recent quarterly forecast failed to meet investor expectations, further dampening optimism around AI. This resulted in a significant market reaction, with Nvidia’s shares dropping 1.5% in extended trading and 9.5% during the regular session, marking a record $279 billion loss in market capitalization in a single day. Despite these setbacks, Nvidia’s shares have still gained 141% this year, buoyed by high expectations for AI advancements.
