Nvidia Under Investigation by the US Department of Justice for Market Practices.

The US Department of Justice (DOJ) has launched a deeper investigation into Nvidia, a leading company in AI (artificial intelligence) chips. The DOJ sent subpoenas to Nvidia and other businesses, asking for information to see if Nvidia might be breaking antitrust laws by using unfair market practices.

Why Is Nvidia Being Investigated?

The investigation focuses on whether Nvidia is making it hard for customers to use other suppliers’ products. The DOJ is concerned that Nvidia may be forcing companies to only use its AI chips, which could hurt competition and make it difficult for others to enter the market.

Nvidia’s Response

Nvidia responded to the investigation by saying its success comes from the high quality and performance of its products. According to Nvidia, customers choose their technology because it delivers better results, and they are free to select any solution that works for them.

Impact on Nvidia’s Stock

After news of the DOJ’s subpoenas came out, Nvidia’s stock took a significant hit, suffering one of its biggest losses in a single day. However, the company’s shares have still more than doubled this year, largely due to the increased demand for AI processors.

vidia’s Acquisition of RunAI Under ScrutinyN

Part of the DOJ’s investigation looks into Nvidia’s recent purchase of RunAI, a company that helps manage AI computing. Regulators are worried this deal could make it even harder for customers to switch to other suppliers. Additionally, they are examining whether Nvidia offers special pricing to customers who exclusively buy their products.

Why This Matters

As AI becomes more important for businesses and governments, Nvidia’s role as a major supplier is drawing attention. Regulators want to ensure the company’s market practices are fair and do not hurt competition.

This explanation simplifies the complex legal investigation into Nvidia, highlighting the potential issues and Nvidia’s response.