Nvidia CEO Jensen Huang speaks at Computex 2024 in Taipei on June 4, 2024.
Chen Yihua | AFP | Getty Images
NVIDIA Shares fell 2% in extended trading on Tuesday. Bloomberg reported The company received a subpoena from the Department of Justice as part of an antitrust investigation.
The drop came after Nvidia’s shares fell nearly 10% during regular trading, wiping $279 billion from its market capitalization.
Bloomberg reported that the Justice Department’s investigation has not yet reached the stage of filing formal charges, and the department is asking whether Nvidia is making it difficult for customers to switch to other suppliers of AI chips, which control more than 80% of the data center AI chip market, according to industry estimates.
Nvidia’s rapid growth in recent years is directly tied to the company’s dominance in AI chips for data centers, which it established years before rivals AMD and Intel started to get serious about the field. Nearly a decade ago, Nvidia developed a programming language for its chips called CUDA, which is a key tool for engineers training advanced AI models like those at the heart of ChatGPT.
Many of Nvidia’s major customers are cloud companies and internet giants, including Microsoft, Alphabet, Meta, Amazon and Tesla.
As Nvidia’s AI chips have become a hot commodity, the company has released new enterprise software subscriptions and marketed its networking products as a key complement to get the most out of the chips.
The latest version of NVIDIA’s chips is An entire server rack designed by NvidiaThis is one example of Nvidia’s efforts to move from just a components supplier to a complete systems provider.
An Nvidia representative told CNBC that the company “won on merit, as reflected in our benchmark results and the value to our customers, who can choose the solution that’s best for them.” The Justice Department declined to comment to CNBC.
