US DOJ Launches Antitrust Investigation into Nvidia Over AI Chip Sales Practices

The U.S. Department of Justice (DOJ) has initiated an antitrust investigation into Nvidia (NVDA.O) following complaints from competitors about potential market dominance abuse in the sale of AI chips. This probe, reported by The Information, has led to a 3.6% drop in Nvidia’s shares during premarket trading on Friday.

Key Points of the Investigation

Market Dominance Concerns: Nvidia, which holds approximately 80% of the AI chip market, is under scrutiny for allegedly pressuring cloud providers to purchase multiple Nvidia products.
Pricing Practices: The DOJ is also examining whether Nvidia charges higher prices for networking gear if customers opt to buy AI chips from competitors like Advanced Micro Devices (AMD.O) and Intel (INTC.O).

Nvidia’s Response

Nvidia has stated its commitment to compliance and transparency, emphasizing its competitive edge built on decades of investment and innovation. The company assured that it would cooperate fully with regulatory inquiries.

Broader Implications

The investigation has garnered attention from U.S. progressive groups and Democratic Senator Elizabeth Warren, who have urged the DOJ to address competition concerns. These groups have criticized Nvidia’s bundling of software and hardware, a practice also under scrutiny by French antitrust authorities.

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