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02/08/24
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Nvidia Stock Lower After Reports of Antitrust Probe By DOJ
On Thursday, The Information reported that NVIDIA Corporation was facing a probe by the U.S. Department of Justice over allegations from its rivals that the firm was abusing its market dominance to develop advanced chips for AI.
On Friday in premarket trading, Nvidia stock dropped 3.6% and extended its losses from the previous day.
The Information cited two sources involved in the discussions and reported U.S. officials had contacted several Nvidia competitors, including Advanced Micro Devices Inc., to investigate potential antitrust activity complaints.
Complaints included antitrust concerns over Nvidia’s acquisition of AI startups to strengthen its position in the industry and allegations that the chipmaker said it would punish customers who bought its rivals’ products.
The report comes just after a Politico report earlier that showed Nvidia had to face an antitrust investigation over its April acquisition of Run:ai.
Nvidia manufactures the most advanced chips used to run AI programs and has seen a huge valuation spike over the last year as it benefited from increasing interest in artificial intelligence.
Nvidia’s dominance in the AI environment has raised question as to whether it was potentially skirting antitrust regulations.
Reports on Thursday also showed that Democratic Senator Elizabeth Warren and U.S. progressive groups urged the DOJ to investigate Nvidia over anti-competitive behavior.
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