US DOJ Probes Nvidia on Competition Concerns: Reports

Run:ai Acquisition and Alleged Anti-Competitive Practice Are Under Scrutiny

Semiconductor designer Nvidia is reportedly the subject of two separate U.S. Department of Justice antitrust probes, focused on its acquisition of an Israeli artificial intelligence company and the chip giant's alleged anti-competition business practices.

Politico reported that the trust-busting wing of Justice is examining Nvidia's purchase of Run:ai. The Information reported the DOJ is assessing if Nvidia has abused dominance in the AI chip market to dissuade competition.

Nvidia in April announced its acquisition of an Israeli graphics processing units management software startup Run:ai in a $700 million deal.

As chip demand for AI computational workloads outpaces supply, the purchase likely brought immense value to the $3 trillion company.

One of Run:ai's key functions is to optimize AI hardware infrastructure, allowing its enterprise customers to do more with fewer chips.

Regulators globally, including in the United States and the United Kingdom, have been paying close attention to big-tech acquisitions, especially in the AI space. They recently pledged to "safeguard against tactics that would undermine fair competition or lead to unfair or deceptive practices in the AI ecosystem."

The DOJ's other investigation is focused on Nvidia allegedly abusing its market dominance to pressure customers into purchasing its products, dissuading them from going to its competitors by overcharging for networking equipment if they bought AI chips from its rivals.

"We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," Nvidia spokesperson Mylene Mangalindan told Politico, adding that the company is "happy to provide any information regulators need."

Nvidia potentially controls around 90% of the global market for chips that are in high demand as necessary pieces to train AI models, and the demand is booming to a point where the chipmaker briefly became the most valuable company in the world, dethroning Microsoft.

The latest news come amid advocacy groups petitioning the DOJ's chief antitrust enforcer, Jonathan Kanter, to carry out an antitrust investigation, accusing Nvidia of scaring off investors from funding rival companies that are "struggling to gain traction" because its "near-absolute dominance of the market is difficult to counter."

The company may also be facing antitrust charges in France over its anti-competitive business practices.

Earlier this year, the DOJ reportedly took the reins on investigating Nvidia over antitrust violations, while the Federal Trade Commission focused on probing OpenAI's relationship with Microsoft.

Source