The US Department of Justice (DOJ) has launched two separate antitrust investigations into Nvidia over the company’s dominance in the field of AI. The purpose of the first investigation will be to study the takeover of the Israeli startup Run:ai by the technology giant. The second investigation will assess whether Nvidia abused its dominance in AI chips to dissuade customers from using competing products.
Image source: NVIDIA
In April 2024, Nvidia announced the acquisition for $700 million of Tel Aviv (Israel) startup Run:ai, which develops workload management and orchestration software based on Kubernetes, which allows more efficient use of computing resources when working with AI applications.
The specific concerns of US, EU and UK regulators surrounding the Run:ai purchase were not disclosed, but the deal prompted them to issue a joint statement pledging to “protect ourselves from tactics that may undermine fair competition or lead to unfair or deceptive practices in AI ecosystem.” Now the Run:ai takeover has come under the scrutiny of the Department of Justice.
The second investigation into Nvidia was the Justice Department’s response to complaints from the tech giant’s competitors. Its goal is to find out whether Nvidia abused its dominant market position to pressure cloud service providers into buying its products. Nvidia is also suspected of overcharging its networking solutions to customers who purchase AI chips from rival companies such as AMD and Intel.
«”We compete based on decades of investment and innovation, scrupulously complying with all laws, making Nvidia openly available in every cloud and on-premises for every enterprise, and ensuring that customers can choose whatever solution is best for them,” an Nvidia spokesperson said. “We will continue to support early innovators in every industry and market and are happy to provide any information that regulators need.”
Experts estimate that Nvidia controls between 70 and 95 percent of the global market for chips needed to train AI models. In June, Nvidia briefly overtook Microsoft to become the world’s most valuable company, driven largely by growing demand for AI technology.
Nvidia’s dominance has angered global regulators, with Reuters reporting the company could face charges of violating French antitrust laws for alleged anti-competitive practices.