The US Department of Justice, as reported by Bloomberg, has begun to officially invite Nvidia itself and other companies to testify in an antitrust investigation. Previously, information was requested in a simpler form, but now witness testimony takes on greater legal weight. This brings the department closer to bringing formal charges against Nvidia.
Image source: NVIDIA
The investigation suggests that Nvidia prevents its customers from switching to products from other suppliers and penalizes customers who do not adhere to the principle of purchasing exclusively its products. Bloomberg first reported on this antitrust investigation in June of this year. The Department of Justice office in San Francisco plays a leading role in it. Investigators began by interviewing major Nvidia customers about the company’s business practices.
Nvidia representatives avoided directly answering Bloomberg’s request to comment on the fact that the investigation had begun, but considered it necessary to state that the company’s dominant position in the market is due to the quality of its products and their performance. Nvidia attracted the attention of antitrust regulators after it briefly became the world’s largest publicly traded company by capitalization in June. Its revenue has increased multiple times for more than the first quarter in a row. Regulators were also attracted by Nvidia’s deal to buy artificial intelligence software developer Run:AI.
The investigation is trying to find out whether buyers who limit themselves to purchasing only Nvidia products enjoy any price preferences on its part, or a priority right to receive scarce components. The head and founder of Nvidia, Jensen Huang, said that he gives preference to supplying products to those companies that immediately begin to use them and do not accumulate them in warehouses. Analysts believe that by the end of the 2024 calendar year, Nvidia will earn more than $120 billion, although just four years ago its revenue was limited to $16 billion. It now receives the vast majority of revenue in the server segment. Investigators fear that this is being achieved by the company abusing its monopoly position in the market. Nvidia’s profits alone this year could exceed the entire revenue of AMD, which is also trying to gain a foothold in the artificial intelligence accelerator segment.