The US Department of Justice (DOJ) has started a deeper investigation into Nvidia, a top company in AI (artificial intelligence) chips. The DOJ has issued subpoenas to Nvidia and other companies, asking for information to determine if Nvidia might be breaking antitrust laws by using unfair market practices.
Why Is Nvidia Being Investigated?
The focus of the investigation is on whether Nvidia is making it difficult for customers to use products from other suppliers. The DOJ is concerned that Nvidia might be forcing companies to exclusively use its AI chips, which could hurt competition and make it harder for other companies to enter the market.
Nvidia’s Response
Nvidia has responded to the investigation by stating that its success comes from the high quality and performance of its products. According to Nvidia, customers choose their technology because it performs better, and they are free to pick any solution that works for them.
Impact on Nvidia’s Stock
After the news of the DOJ’s subpoenas broke, Nvidia’s stock took a big hit, experiencing one of its largest losses in a single day. Despite this, the company’s shares have still more than doubled this year, mainly due to the rising demand for AI processors.
Nvidia’s Acquisition of RunAI Under Scrutiny
Part of the DOJ’s investigation includes Nvidia’s recent purchase of RunAI, a company that helps manage AI computing. Regulators are concerned this deal might make it even harder for customers to switch to other suppliers. They are also looking into whether Nvidia offers special pricing to customers who buy only their products.
Why This Matters
As AI becomes increasingly important for businesses and governments, Nvidia’s role as a major supplier is attracting attention. Regulators want to ensure that the company’s market practices are fair and do not harm competition.