Nvidia was subpoenaed as part of a Justice Department antitrust investigation, according to Bloomberg, ramping up the probe and bringing regulators closer to filing a formal complaint against the tech giant.
Nvidia stock closed down more than 9% Tuesday. (Photo credit should read CFOTO/Future Publishing via ... [+]
The subpoena was sent to Nvidia and other unnamed technology companies, according to Bloomberg, which cited unnamed people familiar with the investigation and reported the Justice Department’s San Francisco office is spearheading the probe.
Antitrust officials believe Nvidia may be making it more difficult for buyers to switch to other chip suppliers while penalizing those that do not exclusively purchase their AI chips, Bloomberg reported—a concern previously shared among those in the chipmaking industry, according to The New York Times.
The investigation into Nvidia has a focus on the company’s $700 million acquisition of AI management firm RunAI as regulators are concerned the deal makes finding alternatives to Nvidia chips difficult, according to Bloomberg.
Nvidia spokesperson John Rizzo responded to Forbes’ inquiry about the probe, saying the company’s merit is reflected in its results and value to customers, “who can choose whatever solution is best for them."
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Nvidia shares closed down 9.5% on Tuesday at $108, later dropping more than 1.5% in after-hours trading. The chip designer has been in a slump since reporting record-setting earnings last week that failed to meet investors’ loftiest expectations. Shares have dropped nearly 15% in the last five days of trading. However, the tech company’s stock is still well up on the year after starting January at $48.17 per share.
Nvidia is one of multiple tech giants involved in the Justice Department investigation, which is also looking into Microsoft’s partnership with OpenAI. The Nvidia probe comes as the company is estimated to control between 70% and 95% of the market for AI chips, according to CNBC. The company’s largest and most notable customers include Microsoft, Meta, Amazon and Google parent company Alphabet, with Microsoft and Meta allocating 40% of their budgets to Nvidia’s hardware, Bloomberg reported. Regulators have not filed a formal complaint against Nvidia, which also dealt with Justice Department subpoenas in 2006 over an antitrust investigation into its graphics chips.
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