AI
Nvidia Under DOJ Scrutiny for Antitrust Concerns
02 August 2024
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Zaker Adham
The US Department of Justice (DOJ) has initiated two separate investigations into Nvidia's business practices, focusing on its acquisition of Run:ai and potential anti-competitive behavior.
The DOJ is conducting two antitrust investigations into Nvidia, a leading player in the AI industry. The first probe, reported by Politico, examines Nvidia's $700 million acquisition of Run:ai, an Israeli startup specializing in GPU management software. The second investigation, as reported by The Information, looks into whether Nvidia has leveraged its dominance in AI chips to discourage customers from using competitors' products.
In April, Nvidia acquired Run:ai, raising concerns among regulators about potential anti-competitive practices. Both US and international regulators have been closely monitoring large tech acquisitions, particularly in the AI sector. In July, US, EU, and UK regulators issued a joint statement emphasizing the need to protect fair competition and prevent deceptive practices in the AI ecosystem.
The second DOJ investigation responds to complaints from competitors, alleging that Nvidia pressured cloud providers to purchase its products and overcharged customers for networking equipment if they opted for AI chips from rivals like AMD and Intel.
Nvidia spokesperson Mylene Mangalindan stated, "We compete based on decades of investment and innovation, scrupulously adhering to all laws. Nvidia is available in every cloud and on-prem for every enterprise, ensuring customers can choose the best solution for them. We will continue to support innovators in every industry and market and are happy to provide any information regulators need."
Nvidia controls an estimated 70 to 95 percent of the market for AI training chips. The company's market dominance has also attracted attention from other global regulators. Last month, Reuters reported that Nvidia might face French antitrust charges for alleged anti-competitive practices. In June, Nvidia briefly surpassed Microsoft as the world's most valuable company, driven by the growing demand for AI technology.