The U.S. Department of Justice has launched an antitrust investigation into Nvidia, focusing on the company's sales practices and market dominance in the AI chip industry.
Nvidia Pushed Cloud Providers
According to Thursday's article in The Information, the U.S. Department of Justice has begun an investigation into Nvidia following rival companies' claims that the company may have exploited its dominant position in the AI chip industry.
In Friday's premarket trade, the company's shares dropped by 3.6%.
According to the article, which cites individuals engaged in the negotiations, DOJ officials are currently investigating whether Nvidia pushed cloud providers to purchase numerous products.
Networking Gear Prices Questioned
Additionally, the probe is trying to determine if Nvidia increases its networking gear prices for clients who purchase AI chips from competitors like Intel and Advanced Micro Devices.
The business did not address the allegations made in the paper, but it did state that it would comply with regulators' requests for information.
"We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," a spokesperson for Nvidia told Reuters in a statement.
Reuters asked the DOJ for comment late Thursday, but they have yet to answer.
According to the article, in order to get further information, investigators have contacted other rivals of Nvidia.
Senator Warren Urges Probe
Progressive organizations in the United States, together with Democratic Senator Elizabeth Warren, have urged the Department of Justice to probe Nvidia for antitrust violations.
The anti-monopoly and pro-government watchdog organizations targeted Nvidia for its software and hardware bundling, a tactic that French antitrust authorities have also mentioned in connection with their impending charges.