US Department of Justice Issues Subpoena to Nvidia... AI Chip Antitrust Investigation Planned

Bloomberg News Report
"Using Other Companies' AI Chips May Disadvantage Clients"

The U.S. Department of Justice has issued a subpoena to investigate whether AI semiconductor company Nvidia has violated antitrust laws.

On the 3rd (local time), Bloomberg News reported, citing sources, that the Department of Justice sent subpoenas to Nvidia and other companies to investigate Nvidia's monopoly in the AI semiconductor market. A subpoena is an official document ordering a specific person to submit evidence or appear in court.

According to sources, antitrust authorities believe that Nvidia makes it difficult for its clients to switch to other suppliers and disadvantages customers who do not exclusively use its AI semiconductors. Currently, Nvidia controls 90% of the AI semiconductor market. Bloomberg analyzed that "by issuing subpoenas, the Department of Justice's investigation has moved one step closer to a formal complaint."

Department of Justice officials are also focusing on Nvidia's acquisition of Run:AI, a software manufacturer that manages AI computing, which took place in April. Concerns have been raised that Nvidia's acquisition of Run:AI could make it more difficult for customers to switch from Nvidia AI semiconductors to other manufacturers. Additionally, the investigation is examining whether Nvidia offers preferential treatment in product supply and pricing to customers who exclusively use its technology or purchase entire systems.

Regarding this, Nvidia stated, "Nvidia has won based on performance and the value provided to customers," adding, "Customers can choose the optimal solution for themselves."

Earlier, Bloomberg reported in June that U.S. antitrust authorities, including the Department of Justice and the Federal Trade Commission (FTC), would launch investigations into Nvidia and Microsoft (MS) for potential antitrust violations. According to the report, the FTC is investigating whether MS, the largest shareholder of OpenAI, the developer of the generative AI service 'ChatGPT,' violated antitrust laws, while the Department of Justice is investigating Nvidia's monopoly in the AI semiconductor market.

On the same day, Nvidia's stock closed at $108 on the New York Stock Exchange, down 9.53% from the previous trading day. The company's market value evaporated by $278.9 billion (approximately 374 trillion won) in one day. Although the overall market showed weakness, with the so-called 'Magnificent 7' stocks such as Apple (-2.72%), MS (-1.85%), Alphabet (-3.94%), Amazon (-1.26%), Meta (-1.83%), and Tesla (-1.64%) all declining, Nvidia's drop was the largest. News of the U.S. government's intensified antitrust investigation into Nvidia further dragged down the stock price.

The Philadelphia Semiconductor Index, composed of semiconductor-related stocks, plunged 7.75%. Amid the market downturn, concerns about an AI bubble resurfaced, intensifying the sell-off.

Brian Mulberry, client portfolio manager at Jaxx Investment Management, analyzed that market volatility driven by concerns over economic slowdown and rising unemployment "is hitting the most overvalued sectors first."