Computers Media - US antitrust watchdog demands information from Nvidia
According to a media report, the American chip company Nvidia has been targeted by US competition watchdogs due to its dominance in chips for artificial intelligence (AI).
05.09.2024, 00:08
05.09.2024, 00:09
SDA
No company that runs AI software in data centers can currently avoid Nvidia chips. However, this is precisely what has now brought the US antitrust watchdogs onto the scene, as reported by the financial service Bloomberg. The US Department of Justice has requested information from Nvidia, according to Bloomberg. The antitrust watchdogs are concerned, among other things, that Nvidia could make it more difficult for customers to switch to the competition, according to sources close to the matter.
Nvidia denies allegations
Nvidia denied, with a significant delay, the statement in the original Bloomberg report that it had received one of the requests for information that had to be answered in a legally binding manner. The company has had this confirmed by the Ministry of Justice. At the same time, the company is prepared to answer all questions from regulators. Bloomberg then confirmed that Nvidia had received a request for information.
Acquisition triggers competition investigation
Nvidia's chips are expensive - but also in short supply. This is because demand remains high, especially from the wealthy tech giants that are in an AI race. Nvidia CEO Jensen Huang is therefore prioritizing customers who can use the chips in their data centers straight away rather than putting them in storage. The Department of Justice's investigation was triggered by Nvidia's plans to acquire RunAI, a company that makes software for managing AI computers, Bloomberg wrote. The competition watchdog also asked whether customers who only use Nvidia's technology would get better conditions, it said. The Ministry of Justice did not wish to comment on the report when asked. In a statement to Bloomberg, Nvidia emphasized that the company is winning in the market thanks to the strength of its offering.
AI doubts cause share price to fall
Even before the Bloomberg report, Nvidia shares fell by 9.5 percent in US trading on Tuesday. Among other things, this was triggered by investor doubts as to how sustainable the AI boom will be. In view of the stock market value of around three trillion dollars, the share price set a negative record with its decline: Nvidia's valuation fell by around 279 billion dollars in one trading day. The share is still worth more than twice as much as at the beginning of the year. On Wednesday, the shares lost a further 1.66 percent, but after Nvidia's clarification, there was a slight gain of a good 0.3 percent in after-hours trading.
AI boom keeps the Group on record course
Nvidia has benefited from the AI boom more than almost any other company. The company's chips have established themselves as the leading hardware for teaching software with AI in data centers. This has brought Nvidia explosive growth in turnover, profit and share price. In addition to the chips, the company also earns money from software. Rivals such as AMD and Intel have so far found it difficult to seriously compete with Nvidia in this business.
