The U.S. Department of Justice has sent a subpoena to AI giant Nvidia as it deepens its investigation into the company’s antitrust practices, Bloomberg News reported on Tuesday, citing people familiar with the investigation.
The antitrust watchdog had previously sent out questionnaires and has now sent a binding demand to Nvidia, the report said, adding that other companies have also received subpoenas.
Authorities are reportedly concerned that the company is making it harder for people to switch to other suppliers, penalizing buyers who don’t have exclusive access to its artificial intelligence chips.
Last month, The Information reported that the Department of Justice had launched an investigation into Nvidia after complaints from competitors that the company had abused its market power.
The subpoena comes at a sensitive time for AI companies, as investors worry about slow returns on big AI investments and recalibrate expectations for the technology.
Nvidia’s quarterly earnings guidance last week, which fell short of investor expectations, is also tempering optimism around AI.
The company’s shares fell 2.5% in after-hours trading on Tuesday after falling 9.5% in regular trading, wiping $279 billion from Nvidia’s market capitalization – the biggest one-day loss ever by a company.
But the company’s shares are still up 141% so far this year, thanks to a dizzying rally fuelled by AI hopes.
Nvidia and the Justice Department did not respond to Reuters requests for comment.
Reporting by Niket Nishant in Bengaluru; Additional reporting by Jody Godoy and Max Cherney; Editing by Tasim Zahid and Shinjini Ganguly
