The US Department of Justice (DOJ) has deepened its antitrust investigation into Nvidia, issuing a subpoena as it scrutinizes the chipmaker’s market dominance in the artificial intelligence (AI) sector.
The move follows earlier inquiries where the DOJ had sent questionnaires to Nvidia, now escalating to legally binding requests for information. The investigation centres on concerns that Nvidia may be stifling competition by making it difficult for customers to switch to alternative suppliers and penalising those who do not exclusively use its AI chips.
This heightened regulatory pressure comes in the wake of complaints from competitors who allege that Nvidia has exploited its leading position in the market. However, Nvidia maintained that its success is based on the merit of its products, citing customer choice and the value its technology delivers. The company asserted that clients are free to choose whichever solutions best meet their needs.
Nvidia’s challenges are not limited to the US. The company has also received regulatory inquiries from South Korea, the European Union, the United Kingdom, and China, all of which are examining its business practices and partnerships.
These investigations coincide with a broader reassessment by investors of the AI sector, particularly concerning the slower-than-anticipated returns on substantial investments in the technology.
The escalating regulatory scrutiny contributed to a significant market reaction. Nvidia’s shares plunged by 9.5 per cent in a single day, erasing USD 279 billion from its market capitalisation—a record one-day loss for any US company. This sharp decline reflects a growing wariness among investors about the long-term prospects of AI technology, despite Nvidia’s stock still being up 141 per cent for the year due to earlier bullish sentiment around AI-driven growth.
