Nvidia Faces Two DOJ Antitrust Probes Over Market Dominance

The US Department of Justice (DOJ) has launched two separate probes into Nvidia concerning antitrust issues related to the computing giant’s AI-focused business dealings. These investigations aim to scrutinize Nvidia's acquisition of Run

and assess whether the company has engaged in anti-competitive practices to maintain its market dominance in AI chips.

Scrutiny Over Run

Acquisition

The first investigation, as reported by Politico, focuses on Nvidia’s acquisition of Run

, an Israeli startup specializing in GPU management software. Nvidia reportedly spent $700 million in April to acquire the startup. While specific concerns surrounding the Runpurchase remain undisclosed, regulators in the US and abroad have increasingly scrutinized large tech acquisitions, especially those involving AI, due to potential anti-competitive business practices and market monopolies. A joint statement issued by major US, EU, and UK regulators in July emphasized the need to “safeguard against tactics that would undermine fair competition or lead to unfair or deceptive practices in the AI ecosystem.”

Allegations of Anti-Competitive Practices

The second investigation, reported by The Information, stems from complaints by Nvidia's competitors. This probe will investigate whether Nvidia has abused its market dominance to pressure cloud service providers into exclusively purchasing its products. Additionally, the investigation will explore claims that Nvidia has overcharged customers for networking equipment if they opted to buy AI chips from rival companies like AMD and Intel.

In a statement to Politico, Nvidia spokesperson Mylene Mangalindan said, “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. We’ll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need.”

Nvidia's Market Dominance

Nvidia's market control is substantial, with estimates suggesting the company holds between 70 percent and 95 percent of the market for chips required to train AI models. This dominance has attracted attention from global regulators. Last month, Reuters reported that Nvidia might face French antitrust charges for alleged anti-competitive practices. Nvidia's significant market presence has also been underscored by its financial performance. In June, Nvidia briefly surpassed Microsoft to become the world’s most valuable company, driven by the soaring demand for AI technology.

Global Implications and Industry Reactions

These investigations highlight the growing concerns about the consolidation of power in the tech industry, particularly in AI. The outcome of these probes could have significant implications for Nvidia and the broader tech ecosystem, potentially leading to more stringent regulations and oversight.