Nvidia has countered reports suggesting it received a subpoena from the U.S. Department of Justice (DOJ) concerning antitrust issues. While the company has expressed its openness to cooperating with any regulatory investigations, it emphasized that no formal subpoena has been issued to date.
Stock Market Reaction
News of a potential DOJ subpoena, which I reported on yesterday, saw Nvidia's stock fall sharply in after-hours trading. The drop followed an already nearly 10% decline in its share price on Tuesday before rebounding slightly on Wednesday. Such market volatility underscores investor anxiety over possible regulatory actions in the competitive tech sector.
Nvidia's commanding position in the AI chip market for data centers has been integral to its recent milestones. Reports suggest the company holds over 80% market share in this area. Nvidia's early investments and innovations have given it an edge over competitors like AMD and Intel. The company credits its market strength to the superior performance and reliability of its chips, as supported by benchmark results and user feedback.
Stance on Regulatory Oversight
Nvidia conveyed its readiness to address any inquiries from regulators. It insists that its market lead is due to the high quality of its products, which meet customer needs effectively. Through its statements, Nvidia seeks to maintain transparency and assuage stakeholders about its regulatory adherence.
Although Nvidia denies receiving a subpoena, it acknowledges a civil investigative demand (CID) from the DOJ. A CID allows the DOJ to gather information to decide whether to pursue legal action, but it does not initiate a formal case.
The DOJ's probe is examining allegations of anticompetitive behavior by Nvidia in the AI sector. Accusations include pressuring clients to exclusively use its AI processors, delaying orders for those who utilize competing GPUs, bundling its GPUs with networking equipment, and charging higher prices for networking products to those opting for non-Nvidia AI chips.
Impact of RunAI Acquisition
Another area of regulatory concern involves Nvidia's acquisition of RunAI, a firm specializing in AI workload management software. There are fears that this deal may further solidify Nvidia's market dominance and limit customers' choices. Integrating RunAI's software might make it difficult for data centers to switch to GPUs from other manufacturers.
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.
