U.S. Justice Department Launches Antitrust Investigation into Nvidia

The U.S. Department of Justice (DOJ) has initiated an antitrust investigation into Nvidia’s recent acquisition of the Israeli AI software firm Run: ai, raising concerns over potential market dominance abuse in the AI chip sector. 

Sources familiar with the matter revealed that the probe also examines allegations that Nvidia has leveraged its market position to coerce customers.

Investigation details

Nvidia, a major player in the AI semiconductor industry, completed its acquisition of Run: AI in April. Although the financial details were not disclosed initially, Tech Crunch later reported that the deal was valued at approximately $700 million. Run: AI specialises in software that enables businesses to manage their AI computing infrastructure across various platforms effectively.

U.S. antitrust attorneys are reportedly scrutinising complaints from several of Nvidia’s competitors. These competitors claim Nvidia has threatened punitive actions against customers who choose products from other companies. According to The Information, this includes threats to increase prices or restrict the quantity of AI chips sold to those who also purchase from Nvidia’s rivals.

Concerns from competitors and customers

The DOJ’s inquiry includes communications with competitors like Advanced Micro Devices (AMD) and various AI chip startups. These discussions aim to gather evidence about Nvidia’s business practices and their impact on the broader market.

One significant allegation involves Nvidia purportedly setting limits on the number of chips customers can purchase unless they exclusively buy from Nvidia. Another accusation states that Nvidia has inflated prices for customers who purchase single items in bundled deals, which typically include high-end chips like the H100 and related cables.

Nvidia’s defense and broader regulatory attention

In response to these allegations, Nvidia spokesperson Mylene Mangalindan asserted the company’s commitment to fair competition. “Nvidia wins on merit,” Mangalindan told Politico. She emphasised that the company’s success stems from prolonged investment innovation and adherence to legal standards. Mangalindan assured that Nvidia is willing to cooperate fully with regulatory authorities to address any concerns.

The U.S. antitrust scrutiny is not Nvidia’s first encounter with regulatory challenges. In July, the French antitrust authority also announced its intentions to investigate Nvidia, particularly focusing on the potential anti-competitive implications of its CUDA chip programming software, which is pivotal in AI development.

The U.S. Justice Department has not made a public statement regarding the ongoing investigation. As the probe continues, industry observers and competitors closely monitor how it will affect Nvidia’s business practices and the broader AI technology market.

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