Top Line
An Nvidia spokesman said Wednesday that the company has not received a subpoena from the Justice Department, contrasting with reports on Tuesday that the company had received a subpoena seeking information as part of an ongoing antitrust investigation into some of the tech industry’s largest companies.
Nvidia shares fell more than 9% on Tuesday. (Photo: CFOTO/Future Publishing via … (+)
CFOTO/Future Publishing via Getty Images
Key Facts
Nvidia spokesman John Rizzo told Forbes that the company has contacted the Department of Justice but “has not been served with a subpoena” and that Nvidia is “happy to answer any questions regulators have about our business.”
Bloomberg reported Tuesday, citing unnamed people familiar with the investigation, that subpoenas have been sent to Nvidia and other unnamed technology companies and that the Department of Justice’s San Francisco office is leading the probe.
Citing anonymous sources, the media outlet reported on Wednesday that Nvidia had received a “civil investigative demand, commonly known as a subpoena,” seeking details about its business and its acquisition of RunAI.
Bloomberg reported that antitrust regulators believe Nvidia could be penalizing companies that don’t buy AI chips exclusively while making it difficult for buyers to switch to other chip suppliers, a concern that has long been shared within the chipmaking industry, according to The New York Times.
According to Bloomberg, the investigation into Nvidia is focusing on the company’s $700 million acquisition of AI management company RunAI, as regulators are concerned the deal will make it harder to find alternatives to Nvidia’s chips.
The Department of Justice did not immediately respond to Forbes’ request for comment.
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tangent
Nvidia shares fell 9.5% to close at $108 on Tuesday and later fell more than 1.5% in after-hours trading. The chip designer has been struggling since last week, when it reported record profits that failed to meet investors’ wildest expectations. Shares fell another 1.7% on Wednesday, for a drop of more than 15% in the past week. But the tech company’s shares are still up significantly year-over-year, from $48.17 per share in early January.
Main Background
Nvidia is one of several tech giants involved in the Justice Department’s investigation, which is also looking into Microsoft’s partnership with OpenAI. The Nvidia investigation comes as the company is estimated to control 70-95% of the AI chip market, according to CNBC. Some of the company’s biggest and most prominent customers include Microsoft, Meta, Amazon and Google parent Alphabet, with Microsoft and Meta allocating 40% of their budgets to Nvidia hardware, Bloomberg reported. Regulators have not filed a formal complaint against Nvidia, but the company also responded to a Justice Department subpoena in 2006 in connection with an antitrust investigation into its graphics chips.
Show more
US regulators investigating Microsoft, NVIDIA, and OpenAI (Forbes)
Nvidia’s French offices reportedly raided over antitrust concerns (Forbes)
