The U.S. Department of Justice has reportedly sent subpoenas to Nvidia Crop. and other companies as part of an antitrust investigation into the company that appears to be ramping up.
Bloomberg, citing people familiar with the investigation, reported today that the Justice Department had previously delivered questionnaires to the companies, with the subpoenas being the next step. They legally require Nvidia and other recipients to provide any information requested as part of the antitrust probe.
The investigation, which has not yet resulted in any formal complaint, is reportedly related to concerns that Nvidia is making it harder to switch to other suppliers and that the company penalizes buyers that don’t exclusively use its artificial intelligence chips.
Reports that Nvidia, along with Microsoft Corp. and OpenAI, were under investigation first emerged in June with a report that the Department of Justice and Federal Trade Commission had come to an agreement on how to launch the investigation. Both the FTC and the Justice Department are tasked with antitrust enforcement, so the agreement on how to proceed was an important milestone in investigating the antitrust claims leveled at the companies.
At the time it was noted that Justice was investigating whether Nvidia was potentially abusing its market dominance for AI processors. Grounds for the investigation were said to include the software Nvidia ships with its chips and the way it distributes those chips to customers.
The investigation into Microsoft and OpenAI, which is being undertaken by the FTC, is seeking to determine whether the two companies have “unfair advantages” in the large language model market. The common theme between all three is AI: Nvidia is by far the market leader in chips and AI software, while OpenAI is the leading player in the generative AI market, backed by Microsoft.
In response to the news, a spokesperson for Nvidia said that its market dominance stems from the quality of its products, which deliver faster performance. “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them,” the spokesperson said.
Nvidia’s market position and practices are not the only part of the company’s business currently on the Justice Department’s radar. The department also was reported in August to be taking a close look at Nvidia’s April acquisition of Run:ai, a company that develops software for managing graphics card clusters.
Where that case becomes interesting is that it has been claimed that the Justice Department is investigating whether Nvidia bought the company to “bury a technology that could curb its main profit engine.”