The U.S. Department of Justice has launched an investigation into complaints against Nvidia for allegedly abusing its market dominance in artificial intelligence chips. According to a report from The Information, the DOJ has been in contact with Nvidia’s competitors, including AMD, to gather information regarding the allegations. One of the key issues being looked into is whether Nvidia is charging higher prices to customers who choose to buy AI chips from competitors like AMD. Additionally, investigators are examining whether Nvidia has been pressuring customers to purchase additional products such as server-connecting cables.
In response to the report, a spokesperson for Nvidia defended the company’s practices, stating that they compete based on decades of investment and innovation. The spokesperson emphasized that Nvidia strictly adheres to all laws and ensures that their products are readily available for both cloud and on-premises deployment. They also mentioned that Nvidia is committed to providing customers with a choice of solutions that best meet their needs. The spokesperson reassured that Nvidia is willing to cooperate with regulators and provide any necessary information to address the allegations.
Following the news of the investigation, Nvidia’s shares experienced a 3.5% decline in premarket trading. This dip in share price was part of a larger global sell-off in semiconductor stocks. While the impact of the investigation on Nvidia’s stock performance remains to be seen, it is clear that investors are reacting to the uncertainty surrounding the company’s market dominance in AI chips.
The Department of Justice’s investigation into Nvidia’s alleged abuse of market dominance in AI chips raises questions about competition and pricing practices within the semiconductor industry. As the investigation unfolds, it will be crucial for Nvidia to cooperate fully with regulators and address any concerns about anti-competitive behavior. Ultimately, the outcome of the investigation will have far-reaching implications for Nvidia’s reputation in the market and its ability to maintain a competitive edge in the rapidly evolving AI chip industry.
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