Report: Nvidia faces DOJ antitrust probe
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Nvidia CEO Jensen Huang speaks during an event in Taipei, Taiwan, on June 2, 2024. Photo: Annabelle Chih/Bloomberg via Getty Images
Antitrust officials at the Justice Department are looking into complaints that chip giant Nvidia is allegedly abusing its market dominance in AI chips, according to a report from The Information.
Why it matters: Nvidia's leadership in advanced AI semiconductors has powered astonishing stock performance over the past year, and the company now owns between 70% and 95% of the market for AI chips used for training and deploying leading AI models, Mizuho Securities estimates, per CNBC.
Zoom in: U.S. officials have in recent weeks reached out to several of Nvidia's competitors, including AMD, about reported issues like threatening customers, as well as recent startup acquisitions, The Information reports.
- Limiting chip orders unless a company bought additional Nvidia products and instilling fear of delayed orders in customers are among some of the alleged high-pressure tactics.
- The company's recently announced deal to buy Run:ai and its 2022 acquisition of Bright Computing have also been a DOJ focus.
Zoom out: Under the Biden administration, DOJ and the Federal Trade Commission have pursued a full-court antitrust press against tech giants, pursuing lawsuits against Apple, Google, Meta and Amazon.
What they're saying: "NVIDIA wins on merit, as reflected in our benchmark results and value to customers," an NVIDIA spokesperson told Axios in a statement.
- "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making NVIDIA openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them."
- "We'll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need."
- The company did not respond to questions about the existence of the probe beyond its statement.
The DOJ did not immediately respond to a request for comment.
What we're watching: Nvidia next reports earnings on August 28.
