The U.S. government is investigating Nvidia

The U.S. Department of Justice is officially investigating Nvidia's dominance over the AI chip market.

Aug 2, 2024 - 21:05

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Nvidia

Nvidia is the target of a new U.S. Department of Justice (DOJ) investigation. The DOJ is looking into Nvidia’s dominance in the AI market through its graphics cards, and specifically looking at if it has leveraged its commanding lead over 80% of that market to lock out competitors from entering it, The Information reports.

On July 30, multiple U.S. groups urged the DOJ to launch an investigation into Nvidia, including democratic senator Elizabeth Warren. The letter to the DOJ cites Nvidia’s command of 80% of all GPU chips in the world, and specifically its 98% dominance in the data center market. “Nvidia’s size means it now holds control over the world’s computing destiny, which gives it dangerous leverage over the global economy,” the letter reads.

The DOJ is reportedly talking with Nvidia’s competitors, including companies like AMD. There are several main components of the investigation, according to Reuters. First, the DOJ is looking into Nvidia’s bundling of software and hardware. CUDA is the foundational platform that runs the AI market, which exclusively works on Nvidia’s hardware. The software stack has made it next to impossible for competitors to enter the AI market, and projects to port or sidestep CUDA have been met with resistance from Nvidia.

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In addition, the investigation is looking at whether Nvidia charges customers more for additional data center equipment if they purchased GPUs from competitors like AMD and Intel. In the past, we’ve seen AMD executives refer to Nvidia as the “GPU cartel.” Jonathan Ross, CEO of AI chip startup Groq, said that “a lot of people that we meet with say that if Nvidia were to hear that we were meeting, they would disavow it … you may get your hardware in a year, or it may take longer, and it’s, ‘Aw shucks, you’re buying from someone else, and I guess it’s going to take a little longer.’”

This isn’t the first time Nvidia has run into issues with the U.S. government. In 2021, the company was sued by the U.S. Federal Trade Commission (FTC) over its deal to purchase chip designer ARM for $40 billion. Similar to the DOJ’s investigation, the FTC cited antitrust concerns in its lawsuit.

Currently, the DOJ is just investigating Nvidia, but it could bring a lawsuit forward if it finds antitrust issues.

Jacob Roach

Jacob Roach is the lead reporter for PC hardware at Digital Trends. In addition to covering the latest PC components, from…

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