The US Department of Justice (DOJ) has stepped up its antitrust inquiry into Nvidia, issuing additional subpoenas to gather more information about the company’s business practices. The development follows the initial round of questionnaires sent to various firms, suggesting the investigation is moving toward a potential formal complaint.
Allegations of Monopolistic Practices
Sources familiar with the investigation told Bloomberg the new subpoenas are aimed at exploring whether Nvidia is engaging in monopolistic behaviors. Allegations suggest Nvidia may be making it difficult for customers to switch to alternative suppliers and might be imposing penalties on those who attempt to do so. Last month, the DoJ announced it would start action against the company.
Nvidia denies these accusations, arguing its market position is due to the superior performance of its products. The company claims its success is based on merit, reflected in benchmark results and customer satisfaction, and asserts customers have the freedom to choose the best available solutions.
Prioritization of Key Customers
Nvidia admits to prioritizing customers who can quickly implement its hardware, particularly those with large data center capacities. Representatives from Nvidia emphasize their commitment to delivering accelerators to operators of significant AI services.
The demand for generative AI services is driving the rapid expansion of Nvidia’s accelerator and networking businesses. Training advanced neural networks often requires tens of thousands of GPUs, with each unit costing between $30,000 and $40,000. Deploying these models also demands substantial hardware resources, varying based on the neural networks’ size and user demand.
Nvidia’s influence in the AI infrastructure market is substantial, with estimates indicating it commands over 80 percent of the market. Despite competition from Intel and AMD, which offer their products like Gaudi3 and MI300X, Nvidia remains a dominant force. The company’s market valuation, which reached $3 trillion in July, has since decreased to about $2.65 trillion. Following the announcement of the new subpoenas, Nvidia’s stock fell by 9.53 percent.
Data Scraping Lawsuit
Nvidia is also facing a lawsuit over its alleged data scraping of video content. David Millette, a YouTube content creator, has filed lawsuits against Nvidia and OpenAI in the Northern District of California. He claims both companies used his videos, along with millions of others, without permission to develop their artificial intelligence models.
Last month, I reported that Nvidia’s Cosmos project was scraping data on YouTube and Netflix to train AI. According to documents and internal communications, Nvidia employees were directed to employ tools like yt-dlp, an open-source YouTube downloader, and virtual machines to bypass IP restrictions and download substantial amounts of video content.
Last Updated on November 7, 2024 2:58 pm CET
