U.S. Department of Justice Launches Antitrust Probe into Nvidia's Sales Practices

The government is reportedly investigating Nvidia for anticompetitive practices

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%.

US launches Nvidia antitrust probe after rivals' complaints, The Information reports

The U.S. Department of Justice (DOJ) has launched an investigation into Nvidia after complaints from competitors that it may have abused its market dominance in selling chips that power artificial intelligence, The Information reported on Thursday. DOJ investigators are looking at whether Nvidia pressured cloud providers to buy multiple Nvidia products, the report said, citing people involved in the discussions. The investigation is also looking into whether Nvidia charges its customers a higher price for networking gear if the customer wants to buy AI chips from rivals such as Advanced Micro Devices and Intel, the report added. Nvidia commands roughly 80% of the AI chip market. The company did not comment on the reported DOJ investigation, but said that it would provide any information that regulators require. "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," a Nvidia spokesperson said in a statement to Reuters . The DOJ did not immediately respond to Reuters' request for comment late Thursday. The report said that investigators have reached out to several Nvidia competitors to gather more details. U.S. progressive groups and Democratic Senator Elizabeth Warren have pressed the DOJ to investigate Nvidia over competition concerns. The groups, which oppose monopolies and promote government oversight of tech companies, among other issues, took aim at Nvidia's bundling of software and hardware, a practice that French antitrust enforcers have flagged as they prepare to bring charges. (Reporting by Angela Christy and Mrinmay Dey in Bengaluru; Additional reporting by Devika Nair; Editing by Edwina Gibbs and Sonia Cheema)

DOJ Investigates Nvidia Over Antitrust Concerns

Nvidia CEO Jensen Huang. (Credit: Bloomberg/Contributor via Getty Images) Nvidia is now facing two investigations from the US Department of Justice over its AI practices, according to new reports published Thursday night. One of the investigations is examining whether Nvidia might have violated any US antitrust laws with its $700 million April acquisition of Israeli AI startup Run:AI, Politico reports, citing five unnamed sources familiar with the probe. The second DOJ investigation is looking into Nvidia's status as a dominating force in the chips market in response to complaints from competitors, The Information reports. This is also an antitrust investigation, but will additionally determine whether Nvidia unfairly pressured cloud providers, and will look into whether Nvidia overcharged customers for its hardware if they opted for a rival's chips. Reached for comment on the investigations, an Nvidia representative tells PCMag: "Nvidia wins on merit, as reflected in our benchmark results and value to customers. We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them. We'll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need." France's competition authority confirmed this month that it's investigating Nvidia over alleged anticompetitive practices as well. The French authority's president has said that charges will be filed "if the investigation is fruitful," Reuters previously reported. Nvidia, which has a staggering market capitalization of $2.38 trillion at time of writing, saw its stock price fall over 6.5% early Friday. By comparison, AMD's market cap sits at a little over $205 billion, and Intel's market cap is approximately $121 billion. In June, Nvidia briefly surpassed Microsoft, and is now the third-largest company in the world by market cap after Apple and Microsoft. It's currently unclear whether these DOJ investigations will be combined into one lawsuit if the US decides to escalate the situation. Earlier this year, the DOJ sued Apple over alleged antitrust violations, arguing that Apple's dominance and practices have made it difficult for competitors to operate on Apple devices. Google is also waiting on the resolution from its four-year antitrust trial. The DOJ pressed charges against Google back in 2020, and the closing arguments for the case were made in May of this year.

US launches antitrust probe into Nvidia over sales practices, The Information reports

DOJ investigators are looking at whether Nvidia pressured cloud providers to buy multiple products, the report said, citing people involved in the discussions. The investigation is also looking into whether Nvidia charges its customers more for networking gear if they want to buy AI chips from rivals such as Advanced Micro Devices and Intel, it added. Nvidia commands roughly 80% of the AI chip market. The company did not comment on the report, but said that it would provide any information that regulators require. "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," a Nvidia spokesperson said in a statement to Reuters. The DOJ did not immediately respond to Reuters' request for comment late Thursday. The report said that investigators have reached out to several of Nvidia's competitors to gather more details. U.S. progressive groups and Democratic Senator Elizabeth Warren have pressed the DOJ to investigate Nvidia over competition concerns. The groups, which oppose monopolies and promote government oversight of tech companies, among other issues, took aim at Nvidia's bundling of software and hardware, a practice that French antitrust enforcers have also flagged as they prepare to bring their own charges. (Reporting by Angela Christy and Mrinmay Dey in Bengaluru; Additional reporting by Devika Nair and Zaheer Kachwala; Editing by Edwina Gibbs, Sonia Cheema and Varun H K)

Nvidia faces US probe over rival complaints related to sales practices

The U.S. Department of Justice has launched a probe into Nvidia (NASDAQ:NVDA) following complaints from rivals that the company allegedly abused its market dominance in selling chips that power AI products, The Information reported. The U.S. officials have reached out to several Nvidia competitors, including Advanced Micro Devices (AMD) and AI chip startups, to collect information about the complaints, the report added citing people involved in the talks. The issues range from allegations that Nvidia has threatened to punish customers who also buy products from its rivals, to alleged concerns about its recent acquisition of startups which boosts its reach on the software AI developers use, the report noted. Nvidia commands about 80% of the AI chip market. The DOJ investigators are checking if Nvidia pressured some of its chip customers, including cloud providers that rent Nvidia-powered servers to app developers, to buy multiple Nvidia products, such as the networking cables which connect servers to one another, the report added. Employees of some Nvidia customers fear that if their companies also buy chips from rival companies such as AMD, Nvidia may charge them a higher price for the chips or limit the amount of chips it would sell to them, according to the report. "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making NVIDIA openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," Nvidia said in a statement to Seeking Alpha. Nvidia added that it would continue to support aspiring innovators in every industry and market and would provide any information regulators need. The DOJ has also checking if Nvidia charges its customers more for networking gear if the customer wants to buy AI chips from competitors such as AMD or Intel (INTC), the report noted. A representative of one of Nvidia's competitors alleged to the DOJ that customers who buy chips and cables from Nvidia are charged less for each product, including the H100 chip, as part of a bundle than they would if they bought only one of the products, as per the report. Giving discounts via bundling is not illegal. Antitrust regulations mainly target product tying, when a company subjects the sale of one product on the purchase of another, the report noted. Separately, Nvidia is also facing scrutiny by the DOJ over possible antitrust issues related to its planned acquisition of Israel-based startup Run:ai. More on Nvidia Nvidia Only Has A Few Key Customers And They're Warning You Nvidia: Key Implications From AMD's Q2 Earnings Nvidia: Inventory And LLM Demand Point To Another Monstrous Quarter Nvidia faces scrutiny of DOJ antitrust probe: report Qualcomm, AMD, Arm lead chips lower as investors await Intel results

US launches antitrust probe into Nvidia over AI chips

STORY: The U.S. Department of Justice has opened an antitrust probe into Nvidia. That's according to a report by tech industry publication The Information on Thursday. It says the move follows complaints from rivals that the firm may have abused its dominant position in the market for AI chips. Officials will reportedly look at whether Nvidia pressured cloud providers to buy multiple products. It will also examine whether the company charges customers a higher price for networking gear if they plan on buying AI chips from rivals like AMD or Intel. In a statement to Reuters, the firm said it "scrupulously" adhered to all laws, and always worked to ensure customers are able to choose the best solution. The report says investigators have reached out to its rivals to gather details. U.S. progressive groups and Democratic Senator Elizabeth Warren have been pressing the DOJ to investigate the company. Antitrust enforcers in France have already indicated they could bring charges, with concerns including the way Nvidia bundles software and hardware.

U.S. DoJ launches Nvidia antitrust investigation -- investigating potential strong-arm tactics related to AI GPU supply

The U.S. gov't wants to find out whether Nvidia is using strongarm tactics. The U.S. Department of Justice (DOJ) has launched an investigation into Nvidia, prompted by allegations of the company potentially exploiting its dominant position in the AI processor market, according to a report by The Information. The probe focuses on whether Nvidia's business practices unfairly limit competition by forcing its customers to buy products in bundles or using strongarm tactics to cease business with its rivals. The U.S. DoJ is reportedly examining whether Nvidia had threatened to punish customers who buy their AI processors from its rivals like AMD and Intel or smaller startups by delaying their long awaited orders. Such practices could clearly stifle competition and eventually limit options on the market of AI processors. However, Nvidia denies such business practices and asserts that it allocates GPUs fairly between its customers. The U.S. DoJ has reportedly contacted Nvidia competitors, including AMD, to acquire information about the complaints, The Information claims. Also, the investigation is looking into allegations that Nvidia pressured cloud service providers into purchasing multiple products together, such as A100 or H100 GPUs for AI and HPC workloads along with Mellanox-branded networking gear, possibly restricting their choices. The DoJ is also investigating claims that Nvidia may have imposed higher prices on networking equipment for customers opting for AI chips from competitors like AMD and Intel. Nvidia currently holds a significant share of the AI processor market, approximately 80%, according to some analysts. This dominant position has raised concerns among competitors and regulators, who worry about the company's influence on market dynamics. The ongoing investigation aims to determine if Nvidia's actions constitute an abuse of this market power. In response to the investigation, Nvidia said that it operates within legal boundaries, emphasizing its commitment to offering products transparently across various platforms, including cloud and on-premises solutions. The company has expressed readiness to cooperate with the investigation and provide necessary information to regulators. The U.S. DoJ investigation of Nvidia follows a similar investigation by French authorities. The French Competition Authority is concerned that the AI sector essentially depends on Nvidia's processors that use the company's proprietary CUDA software stack.

Nvidia reportedly faces a U.S. DOJ antitrust probe after complaints from rivals

The DOJ has reached out to Nvidia's competitors such as AMD to gather information about the complaints, according to the report published on Thursday. Investigators are looking at whether Nvidia charges its customers higher prices for products if that customer wants to buy AI chips from rivals such as AMD, the report said. The DOJ is also looking at whether Nvidia has pressured customers to buy additional products such as cables that connect servers together, The Information reported. Nvidia and the DOJ were not immediately available for comment when contacted by CNBC. Nvidia shares dipped 3.5% in premarket trade amid a global sell-off in semiconductor stocks.

Nvidia faces US antitrust probe amid complaints from competitors

The booming AI chipmaker has been facing increasing regulatory scrutiny on both sides of the Atlantic. The US Department of Justice is investigating complaints made against Nvidia by its competitors alleging that the AI chipmaker is actively stifling competition in the chips market. Nvidia, which has grown in leaps and bounds in recent months and is now the world's third most valuable company by market cap, has been providing the bulk of the powerful chips needed to develop generative AI models. But the company led by CEO Jensen Huang is also allegedly abusing its market dominance by threatening to punish customers who buy products from its competitors, according to a report by The Information. People familiar with the matter told the publication that that US antitrust officials have spoken to Nvidia competitors such as Advanced Micro Devices and AI start-ups. Regulators are also reportedly concerned about the increasing number of AI start-ups being acquired by Nvidia to strengthen its grip on the software used by AI developers. Nvidia has been under regulatory scrutiny for a while now. In June, reports suggested that Nvidia was one of three major players in the AI space - the other two being Microsoft and OpenAI - that were set to be subject to federal antitrust investigations in the US. People familiar with the matter told The New York Times at the time that the US Department of Justice and the Federal Trade Commission (FTC) struck a deal to divvy up the investigations of potential anticompetitive behaviour among the three companies. The report suggested that the Department of Justice was to take the lead on investigating Nvidia under antitrust laws while the FTC was to look into deals struck between Microsoft and OpenAI, valued in the billions. Less than a month later, Nvidia was in trouble across the Atlantic as French regulators began preparing to charge the company for breaking competition laws in the country. The chipmaker was reportedly raided by French authorities last September in an unannounced visit and seizure operation after suspicions that it was implementing "anticompetitive practices". The raid was linked to a broader focus on the cloud computing sector, the regulator said. This linked back to a report from a year ago that said Microsoft, Google and Amazon Web Services dominated the sector and potentially hindered competition at the time. In its most recent earnings, Nvidia reported record quarterly revenue of $26bn - marking an 18pc increase over the previous quarter and a 262pc increase over the same period last year. Net income shot up too, going from $2bn a year ago to nearly $15bn as of May. Find out how emerging tech trends are transforming tomorrow with our new podcast, Future Human: The Series. Listen now on Spotify, on Apple or wherever you get your podcasts.

Nvidia faces two DOJ antitrust probes over market dominance

The US Department of Justice (DOJ) has reportedly launched two separate probes into Nvidia regarding antitrust concerns about the computing giant's AI-focused business dealings. The first investigation, reported by Politico, will see the DOJ examine Nvidia's buyout of Run:ai, while the second, as reported by The Information, will assess if Nvidia abused its dominance in AI chips to discourage customers from using competing products.

Nvidia faces two antitrust investigations over AI chips, chipmaker denies charges - Times of India

Nvidia is facing two antitrust investigations by the US Department of Justice (DOJ) after it received complaints for the chipmaker's competitors, a report has said. Last month, reports suggested that the company may face French antitrust charges for alleged anti-competitive practices. Citing two people involved in the discussions, The Information reports that the DOJ reached out to Nvidia competitors, including Advanced Micro Devices, to gather information about the complaints. "In recent weeks, US officials reached out to several Nvidia competitors, including Advanced Micro Devices and Al chip startups, to gather information about the complaints. The issues range from allegations that Nvidia has threatened to punish customers who also buy products from its competitors to potential concerns about its recent acquisition of startups that strengthen its grip on the software AI developers use," the report noted. What the US Justice Department is investigating The Justice Department probe reportedly centers on allegations that the company has pressured cloud providers to purchase multiple Nvidia products, potentially limiting competition. It is also said to be examining whether Nvidia charges higher prices for networking equipment to customers who opt for AI chips from rivals AMD or Intel. Nvidia holds approximately 80% of the AI chip market, as per news agency Reuters. Nvidia denies any wrongdoing The company has denied any wrongdoing and pledged to cooperate with the investigation. "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them. We'll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need," Nvidia spokesperson Mylene Mangalindan said in a statement. Last month, a Reuters report , people with direct knowledge of the matter as saying that Nvidia may be charged by the French antitrust regulator for allegedly anti-competitive practices. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

Nvidia Down Nearly 4% In Pre-Market Trading As DOJ Reportedly Launches Antitrust Probe Over Allegations Of Monopolistic Practices - Intel (NASDAQ:INTC), Advanced Micro Devices (NASDAQ:AMD)

Nvidia Corp. NVDA stock fell nearly 4% in premarket trading on Friday amid reports of an antitrust investigation by the U.S. Department of Justice over allegations of monopolistic practices in the AI chip market. What Happened: The DOJ has commenced an inquiry into Nvidia following complaints from its competitors about potential misuse of its dominant position in the AI chip market, The Information reported on Thursday, citing people involved in the discussions. The investigation is focused on whether Nvidia pressured cloud providers to purchase multiple Nvidia products. The probe also examines whether Nvidia charged customers higher prices for networking gear if they wanted to buy AI chips from rivals such as Advanced Micro Devices AMD and Intel Corp. INTC. Nvidia currently holds approximately 80% of the AI chip market. "We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," an Nvidia spokesperson told Reuters. Progressive groups and Senator Elizabeth Warren (D-Mass.) have advocated for the DOJ to investigate Nvidia over competition concerns. These groups have been critical of Nvidia's bundling of software and hardware, according to the report, a practice that French antitrust enforcers have also flagged. See Also: Trump's Son-In-Law-Backed Software Giant QXO Drops 80% In Pre-Market, Valuation Nosedives From $90B To $8.6B Why It Matters: The DOJ's investigation into Nvidia is part of a broader regulatory focus on the AI sector. In June, it was reported that the U.S. Justice Department and the Federal Trade Commission had finalized an agreement to facilitate potential antitrust probes into the dominance of AI industry leaders, including Microsoft Corp. MSFT, OpenAI, and Nvidia. On Wednesday, former House Speaker Nancy Pelosi (D-Calif.) disclosed the purchase of additional Nvidia shares, while selling a portion of her Microsoft holdings. Moreover, Nvidia's market value has seen a meteoric rise, with predictions from prominent investors suggesting it could reach nearly $50 trillion within a decade. This bullish outlook is driven by Nvidia's pivotal role in the growing demand for AI chips, which are essential for training and operating advanced generative AI models. Despite U.S. export controls, Nvidia is projected to generate $12 billion in China this year through the sale of AI chips designed to comply with these restrictions. This underscores Nvidia's strategic maneuvers to maintain its global market presence. Price Action: Nvidia's stock closed at $109.21 on Thursday, down 6.67% for the day. In pre-market trading, the stock continued its downward trend, falling an additional 3.53%. Despite this recent decline, Nvidia's stock has experienced significant growth year to date, rising by 126.72%, according to data from Benzinga Pro. Read Next: Amazon Says Trump Assassination Attempt And Paris Olympics Responsible For Lower Q3 Revenue Forecast, Shares Slide In After-Hours: 'Customers Only Have So Much Attention' Image Via Shutterstock This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote Market News and Data brought to you by Benzinga APIs

DoJ makes move as AI antitrust storm gathers round Nvidia

US regulator reportedly not happy about Run:ai buy... nor industry dominance The US Department of Justice has started an investigation into Nvidia's acquisition of Run:ai, a startup offering orchestration tools for AI workloads. The news follows calls from pressure groups for the DoJ to look into the company's market dominance, plus earlier reports that the GPU giant would likely face a probing from the Feds and potentially the EU competition watchdog as well. According to reports, the DoJ is looking into Nvidia's buyup of Run:ai, an Israeli company which develops a Kubernetes-based workload management and orchestration platform for AI processing jobs, amid concerns it could further entrench the Santa Clara-based outfit's position in training AI models. We asked Nvidia and the Justice Department for comment. The GPU supremo announced the acquisition of Run:ai back in April, in a deal said to be valued at roughly $700 million. This is peanuts to Nvidia, of course, which briefly became the world's most valuable company in June with a market capitalization of $3.335 trillion. But reports also suggest that the DoJ is also investigating allegations that Nvidia has been abusing its market dominance in the GPU accelerators that are used for AI model training. It is not clear if this would constitute a second, possibly separate probe. According to The Information, Justice Department officials have been in contact with some of Nvidia's rivals, including AMD and some AI chip startups, in order to gather information about the complaints. Citing unnamed sources, it says that the allegations include that Nvidia threatened to punish customers that also buy rival products, as well as concerns about its recent acquisition of startups - such as Run:ai - that consolidate its grip on the software AI developers use. Such punishments are said to include charging customers more for its high-performance networking gear if the customer was planning to buy AI accelerators from competitors instead of Nvidia. Some kind of investigation into the chip company's apparent dominance of the AI accelerator market has been on the cards for a while. Nvidia is arguably a monopoly player, said to have an 88 percent share of the GPU market, according to some estimates. Just this week, a number of advocacy groups submitted a letter to the DoJ urging it to carry out an antitrust probe into Nvidia, accusing it of abusive monopolistic business practices and saying the corporation was in a position to crowd out competitors and set global pricing. Earlier this year there were reports of pending investigations into anticompetitive behavior in the burgeoning and lucrative AI industry, with the DoJ said to be taking the lead on scrutinizing Nvidia, while the Federal Trade Commission (FTC) probed generative AI developer OpenAI and its relationship with Microsoft. The DoJ and the FTC both declined to comment at that time. French regulators are also reported to be preparing charges against Nvidia over alleged anti-competitive practices. Last month, the EU's Competition Commissioner Margrethe Vestager said that the European Commission had concerns over Nvidia's apparent dominance of the GPU market, and had been in contact with the company. However, she stated that things were at a preliminary stage and nothing that could be considered regulatory action was yet on the cards. ®