Nvidia (NVDA) shares are falling on Friday following news that the U.S. Department of Justice (DOJ) is investigating the company for potential antitrust violations. Politico reports that the DOJ is looking into whether Nvidia’s acquisition of AI startup Run:AI could create a monopoly in the artificial intelligence space.
Morning Brief anchors Shauna Smith and Brad Smith have more details.
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This post was written by Angel Smith
Video Transcript
NVIDIA shares are falling today as the company watches a selloff following a string of AI acquisitions and the U.S. Department of Justice investigating the company for possible antitrust violations.
Well, according to political sources, NVIDIA acquired the AI startup in April this year, reportedly spending $700 million on the deal.
And we continue to thoroughly analyze all of Rapp’s M&A bids, whether it be something like a soft acquisition or at least making some sort of significant investment in a company and having some sort of exclusivity tied to that investment rather than acquiring it outright.
I think NVIDIA and Microsoft are two of the poster children for spending a lot of money and making acquisitions that regulators would normally not care about at all.
But I think in this position, regulators are trying to make sure that what’s happening now isn’t a repeat or a repeat of what Google and Alphabet did when Google acquired DoubleClick, which really ensured that Google had a near monopoly position within the digital advertising market here.
But this time, I’m thinking about the degenerate AI situation.
Well, I think the short answer is they’re considering whether there are any concerns given NVIDIA’s dominance in this space, the concentration of new technology, the fact that it’s in the hands of a few companies, and that’s why they’re considering this acquisition and what it ultimately means for competition going forward.
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And actually, this isn’t the only DOJ report circulating here today regarding NVIDIA.
A new report also claims that Department of Justice officials are contacting NVIDIA competitors, including AMD, to investigate their practices regarding the sale of artificial intelligence (AI) chips.
Now, reports are that NVIDIA is investigating whether it pressured cloud providers to buy multiple products.
So again, that report is from the information, and the other report that Brad just mentioned is from Politico about the acquisition of Run AI, an Israeli startup that is looking to virtualize GP U.
Again, two reports came out this morning, one about politics and one about information detailing a potential Department of Justice investigation into NVIDIA, but they’re all based on NVIDIA’s current dominance in the AI chip space.
