Nvidia is facing an antitrust probe from US regulators amid competitor complaints, report says
Aug 2, 2024, 12:31 PM
A sign to a Nvidia office building is shown in Santa Clara, Calif., Wednesday, May 31, 2023. (AP Photo/Jeff Chiu)
Credit: ASSOCIATED PRESS
(AP Photo/Jeff Chiu)
NEW YORK (AP) — Antitrust tensions are heating up in the chipmaking industry. Rivals have accused Wall Street darling Nvidia of abusing its market dominance in selling chips that power artificial intelligence — and the U.S. Justice Department is now investigating these complaints, technology news site The Information reported.
According to the news outlet, which cited unnamed sources familiar with the discussions, Justice Department officials are looking into concerns Nvidia is potentially cornering the market and pressuring its customers to unfairly retain business. That includes allegations of Nvidia threatening to punish those who buy products from both the Santa Clara, California-based tech giant and its competitors.
The Information also reported that U.S. officials had reached out to several Nvidia competitors about the complaints.
The Justice Department declined to comment or provide further information when reached by The Associated Press on Friday.
But a statement from Nvidia said the company “wins on merit” — and competes “based on decades of investment and innovation, scrupulously adhering to all laws.”
Without directly acknowledging details of The Information’s Thursday report, the company added that it is “happy to provide any information regulators need.”
Nvidia has faced calls for an antitrust investigation from some Democratic lawmakers and progressive groups before. Earlier this week, 10 progressive advocacy groups — including Demand Progress Education Fund and Tech Oversight Project — penned a letter to Assistant Attorney General Jonathan Kanter in support of an antitrust investigation into the chipmaker.
“Nvidia is the world’s chip gatekeeper,” the groups wrote, arguing the company had “bullied its way into a prominent investment position” by leveraging scarce supply alongside tactics like blocking customers from doing business with competitors. “Such a company deserves the most aggressive scrutiny that the Department of Justice can bring to bear.”
Nvidia’s has cemented itself as a poster child for the artificial intelligence boom — and in the process become one of the most valuable companies in the world. In June, the tech giant briefly reached a market value of more than $3.3 trillion.
Some of that market momentum has stalled a little since — and any stock climbing to such heights is vulnerable to some investors selling shares to lock in profits. On Friday afternoon, shares for Nvidia were down 3%.
