Nvidia Served With Subpoena In US Antitrust Probe

Nvidia and other tech companies have received subpoenas from the US Justice Department as part of its antitrust probe into the AI chipmaker’s business practices, Bloomberg reported, taking the investigation a step further toward formal charges.

The Santa Clara-based company is by far the dominant provider of GPU accelerator chips used in artificial intelligence (AI) data centres.

The Justice Department previously delivered questionnaires to companies.

Its move to legally binding requests to oblige recipients to provide information is a step closer to filing a formal complaint.

Legal obligation

The DOJ’s antitrust probe emerged in June, with the FTC reportedly opening similar investigations into the conduct of Microsoft and ChatGPT developer OpenAI, which is heavily backed by the Windows maker.

Regulators are concerned Nvidia is making it harder to switch to rival GPUs and that it penalises buyers who do not exclusively use its chips, the Bloomberg said.

The DOJ has reportedly been contacting other technology companies to gather information, with its San Francisco office leading the inquiry.

The probe has also been focusing on Nvidia’s acquisition in April of RunAI, which makes software for managing AI computing, over concerns the deal would make it harder for customers to switch from Nvidia chips, Bloomberg’s report said.

Regulators are also looking at whether Nvidia gives preferential pricing to customers who use its technology exclusively or buy complete systems rather than solely processors.

Nvidia chief executive Jensen Huang has said he prioritises customers who can make use of the company’s products as soon as they are received, in order to prevent stockpiling and speed up broader AI adoption.

Sales practices

Nvidia said its success is due to the quality of its products.

“Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them,” the company said.

The subpoenas are only one of the first steps in the probe, which is likely to take “months”, said Bill Baer, former US Assistant Attorney General for the Antitrust Division, in an interview with Yahoo Finance.

Nvidia’s shares have more than doubled in a year and are worth nine times their value in November 2022, when OpenAI launched ChatGPT.

That’s even after the company lost $279 billion ($212bn) in market value in a record-setting single-day slump on Tuesday.

Last month Nvidia reported explosive sales growth, putting it on track to bring in as much in profit this year as the total sales of its nearest rival, AMD.

Its sales have been more than doubling each quarter as tech companies snap up its processors to build out AI infrastructure.