Nvidia Faces Antitrust Scrutiny Over AI Chip Market Control

Nvidia's shares saw fluctuations after the announcement of a subpoena by the Department of Justice (DOJ) regarding an antitrust investigation into the company's practices in the AI chip market. The DOJ is scrutinizing Nvidia for potentially making it difficult for customers to switch suppliers, asserting that the tech giant penalizes buyers who do not exclusively use its AI chips. Antitrust officials, according to sources from Bloomberg, estimate that Nvidia controls between 80% to 95% of the AI chip market, a figure that naturally raises alarms among industry regulators. Nvidia’s business strategy has involved extensive early investments in technology, resulting in them holding a significant market stake. Critics argue that Nvidia's reliance on its proprietary Cuda software may inhibit businesses from exploring alternatives from competitors like AMD or Intel. Despite these allegations, Nvidia maintains that their success stems from smart investments, rather than monopolistic practices. Nevertheless, the inquiry by the DOJ has prompted discussions about the regulatory environment that governs technology dominance in a rapidly evolving market. The outcome remains uncertain, as investigations can take considerable time before leading to formal complaints or resolutions, and there are precedents where similar inquiries yielded no significant actions against the companies involved.