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Nvidia is facing calls for an antitrust investigation from Sen. Elizabeth Warren (D-Mass.) and several progressive groups who worry that artificial intelligence giants are dominating the AI chip market.
AI giant NVIDIA has about 80% of the market share, and rising demand for AI has pushed its market capitalization to more than $3 trillion at one point this summer. The rest of the market is primarily rented out to customers by cloud computing companies like Google, Microsoft and Amazon Web Services, and NVIDIA’s market share would be closer to 100% if that were excluded.
Warren and 10 other progressive groups, including Demand Progress, sent a letter this week to Justice Department antitrust director Jonathan Cantor urging him to investigate Nvidia’s business practices, citing concerns that the company’s bundling of software and hardware products used to run the complex models that train generative AI could stifle competition.
“This aggressive, proprietary approach runs counter to industry standards for collaboration and interoperability, locks in customers and stifles innovation,” the groups wrote.
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Sen. Elizabeth Warren and other progressives have challenged Nvidia’s outsized influence in the AI chip market. (Ting Shen/Bloomberg via Getty Images | Justin Sullivan/Getty Images)
“Allowing one company to effectively become the gatekeeper of the world’s AI future is dangerous and poses serious economic risks,” Warren added in a statement to Reuters.
Ticker Security Last Change Change Rate NVDA NVIDIA CORP. 107.27 -1.94 -1.78%
In a statement to Fox Business, an Nvidia spokesperson said the company believes “the regulatory system is working as intended, stimulating growth and investment in breakthrough technologies,” noting the company’s long-term investments in AI-enabling technologies.
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Nvidia CEO Jensen Huang showed off the company’s AI technology during the trade conference. (Justin Sullivan/Getty Images)
“As Moore’s Law was coming to an end, we created an entirely new model of computing and invited researchers, scientists, developers, ecosystem partners, customers and employees to explore with us what was once a zero-billion dollar market,” the company said. “When we released DGX1 in 2016 and delivered the first AI supercomputer to OpenAI, few people understood why we spent billions of dollars to build it.”
“Today, accelerated computing is sustainable computing. Every application that can be accelerated should be the way forward, and we are focused on unlocking new markets and growth opportunities for our partner ecosystem. Regulators have nothing to worry about because we strictly comply with all laws and make NVIDIA openly available to any company, on any cloud and on-premise. We will continue to support aspiring innovators in every industry and market, and are happy to provide any information regulators need,” Nvidia added.
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Senator Elizabeth Warren joined progressive groups in calling for an antitrust investigation into Nvidia. (Chip Somodevilla/Getty Images)
Reuters reported in June that U.S. regulators had reached an agreement in which the Department of Justice would oversee a potential antitrust investigation into Nvidia, while the Federal Trade Commission would investigate Microsoft and OpenAI.
Nvidia shares were down more than 6% by early Thursday afternoon after the report and a small market-wide sell-off caused the S&P 500 to fall about 1.5%. Despite these headwinds, Nvidia shares are up more than 127% this year.
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Reuters contributed to this report.
