Antitrust tensions are heating up in the chipmaking industry, as rivals have accused Wall Street darling Nvidia Corp of abusing its market dominance in selling chips that power artificial intelligence (AI) — and the US Department of Justice is now investigating these complaints, technology news site The Information reported.
The news outlet, which cited unnamed sources familiar with the discussions, said that justice department officials are looking into concerns that Nvidia is potentially cornering the market and pressuring its customers to unfairly retain business.
That includes allegations of Nvidia threatening to punish those who buy products from the Santa Clara, California-based tech giant and its competitors.
Photo: Ann Wang, Reuters
The Information also reported that US officials had reached out to several Nvidia competitors about the complaints.
The justice department declined to comment or provide further information when reached on Friday.
However, a statement from Nvidia said the company “wins on merit” — and competes “based on decades of investment and innovation, scrupulously adhering to all laws.”
Without directly acknowledging details of The Information’s Thursday report, the company added that it is “happy to provide any information regulators need.”
Nvidia has faced calls for an antitrust investigation from some Democratic lawmakers and progressive groups before. Earlier last week, 10 progressive advocacy groups — including Demand Progress Education Fund and Tech Oversight Project — penned a letter to US Assistant Attorney General Jonathan Kanter in support of an antitrust investigation into the chipmaker.
“Nvidia is the world’s chip gatekeeper,” the groups wrote, adding that the company had “bullied its way into a prominent investment position” by leveraging scarce supply alongside tactics like blocking customers from doing business with competitors.
“Such a company deserves the most aggressive scrutiny that the Department of Justice can bring to bear,” they said.
Nvidia has cemented itself as a poster child for the AI boom — and in the process become one of the most valuable companies in the world. In June, the tech giant briefly reached a market value of more than US$3.3 trillion.
Nvidia’s upcoming AI chips would be delayed due to design flaws, The Information reported, citing two unidentified people who help produce the chip and its server hardware.
The chips might be delayed by three months or more, which could affect Nvidia’s customers including Meta Platforms Inc, Google LLC and Microsoft Corp.
Nvidia last week informed Microsoft about a delay affecting the most advanced AI chip models in the Blackwell series, an unidentified Microsoft employee and another person said.
The delays mean big shipments are not expected until the first quarter of next year, The Information added.
A spokesperson for Nvidia would not comment on its statements to customers about the delay, but told The Information that “production is on track to ramp” later this year.
Additional reporting by Bloomberg
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