US Department of Justice opens antitrust investigation into Nvidia

Nvidia antitrust investigation: The US Department of Justice has initiated an antitrust investigation into Nvidia following complaints from competitors about potential abuses of market power in the AI chip sector, according to a report by The Information. The inquiry is centered on allegations that Nvidia may have pressured cloud service providers to purchase multiple products and charged higher prices for networking equipment if customers opted for AI chips from rival firms such as AMD and Intel.

Nvidia, which holds approximately 80 per cent of the AI chip market, saw its shares drop about 3.6 per cent in premarket trading following the news. The company has stated it will cooperate fully with regulators and emphasized its commitment to competition, asserting that its products are available across various platforms and that customers have the freedom to choose the best solutions for their needs.

The DOJ has yet to comment on the investigation, and Nvidia has declined to provide further details beyond its initial statement. Progressive groups and Senator Elizabeth Warren have been advocating for a closer examination of Nvidia's market practices, particularly its bundling strategies, which are also under scrutiny by French antitrust authorities.

Nvidia share price surged nearly 13 per cent and added about $330 billion in stock market value on Wednesday, a record one-day gain for any company on Wall Street. Nvidia stock price jumped 12.81 per cent to $117.02 per share and is now valued at $2.88 trillion, making it the third most valuable company on Wall Street, behind Apple and Microsoft.

Nvidia’s market capitalisation surge shattered Wall Street’s previous record, which Nvidia also set on February 22 with a $277 billion gain, Reuters reported. Nvidia’s highest-ever closing stock market value was $3.34 trillion on June 18, according to LSEG.

(With Reuters inputs)