Topline
An Nvidia spokesperson said Wednesday the company was not subpoenaed by the Justice Department, contrasting a report Tuesday that the company received a subpoena for information as part of an ongoing antitrust investigation into some of the technology sector’s biggest players.
Nvidia stock closed down more than 9% Tuesday. (Photo credit should read CFOTO/Future Publishing via Getty Images)
CFOTO/Future Publishing via Getty Images
Key Facts
Nvidia spokesperson John Rizzo told Forbes the company inquired with the Justice Department and has “not been subpoenaed,” noting Nvidia is “happy to answer any questions regulators may have about our business.”
Bloomberg reported Tuesday a subpoena was sent to Nvidia and other unnamed technology companies, citing unnamed people familiar with the investigation and reporting the Justice Department’s San Francisco office was spearheading the probe.
The outlet reported Wednesday, citing an unnamed source, that Nvidia received “a civil investigative demand, which is commonly referred to as a subpoena,” requesting details about its business and its RunAI acquisition.
Antitrust officials believe Nvidia may be making it more difficult for buyers to switch to other chip suppliers while penalizing those that do not exclusively purchase their AI chips, Bloomberg reported—a concern previously shared among those in the chipmaking industry, according to The New York Times.
The investigation into Nvidia has a focus on the company’s $700 million acquisition of AI management firm RunAI as regulators are concerned the deal makes finding alternatives to Nvidia chips difficult, according to Bloomberg.
The Justice Department did not immediately respond to Forbes’ request for comment.
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Tangent
Nvidia shares closed down 9.5% on Tuesday at $108, later dropping more than 1.5% in after-hours trading. The chip designer has been in a slump since reporting record-setting earnings last week that failed to meet investors’ loftiest expectations. Shares dropped another 1.7% on Wednesday, and are now down more than 15% in the past week. However, the tech company’s stock is still well up on the year after starting January at $48.17 per share.
Key Background
Nvidia is one of multiple tech giants involved in the Justice Department investigation, which is also looking into Microsoft’s partnership with OpenAI. The Nvidia probe comes as the company is estimated to control between 70% and 95% of the market for AI chips, according to CNBC. The company’s largest and most notable customers include Microsoft, Meta, Amazon and Google parent company Alphabet, with Microsoft and Meta allocating 40% of their budgets to Nvidia’s hardware, Bloomberg reported. Regulators have not filed a formal complaint against Nvidia, which also dealt with Justice Department subpoenas in 2006 over an antitrust investigation into its graphics chips.
Further Reading
U.S. Regulators Are Looking Into Microsoft, Nvidia And OpenAI (Forbes)
Nvidia’s French Offices Raided Over Antitrust Concerns, Report Says (Forbes)