Antitrust tensions are rising in the semiconductor manufacturing industry as rivals accuse Wall Street darling Nvidia of abusing its market power in selling chips that power artificial intelligence, and the Department of Justice is now investigating the allegations, technology news site The Information reported.
The news outlet, citing anonymous sources familiar with the discussions, said Justice Department officials are investigating concerns that Nvidia is monopolizing markets and unfairly pressuring customers to retain their business, including allegations that Nvidia has threatened to punish people who buy products from both the Santa Clara, California-based tech giant and its competitors.
The Information also reported that US authorities have contacted several of Nvidia’s competitors about the complaints.
The investigation comes weeks after the Department of Justice Agreed The Federal Trade Commission and the Justice Department’s Antitrust Division will split oversight of companies in the burgeoning AI industry. He oversees chipmaker Nvidia.
The Justice Department was contacted by The Associated Press on Friday but declined to comment or provide further information.
But in a statement, Nvidia said the company was “winning on its own merits” and competing “based on decades of investment and innovation, and in strict compliance with all laws.”
The company added, without directly acknowledging the details of The Information’s Thursday report, that it was “happy to provide any information required by regulators.”
Nvidia has previously faced calls for an antitrust investigation from Democratic lawmakers and progressive groups. Earlier this week, 10 progressive advocacy groups, including the Demand Progress Education Fund and the Tech Oversight Project, sent a letter to Assistant Attorney General Jonathan Cantor in support of an antitrust investigation into the chipmaker.
“Nvidia is the gatekeeper of the world’s semiconductors,” the group wrote, alleging that the company “aggressively acquired an investment position” through tactics that included exploiting scarce supplies and blocking customers from doing business with competitors. “Companies like this deserve the most rigorous scrutiny the Department of Justice can muster.”
Nvidia has cemented itself as a poster child for the artificial intelligence boom, and in the process become one of the world’s most valuable companies. In June, the tech giant’s market capitalization briefly surpassed $3.3 trillion.
Market momentum has since stalled a bit, and with prices this high, there’s a risk that some investors will sell off their shares to lock in profits. Nvidia shares were down 3% on Friday afternoon.
