Nvidia, the tech giant leading the charge in artificial intelligence (AI) hardware, has denied reports that it received an antitrust subpoena from the U.S. Department of Justice (DOJ). The company’s share price saw a slight uptick in after-hours trading following the statement.
According to a spokesperson, Nvidia has not been subpoenaed, despite speculation in the media. “We have inquired with the US Department of Justice and have not been subpoenaed,” the spokesperson clarified to Cointelegraph, echoing similar reports from CNBC. The company also expressed its readiness to cooperate with regulators, adding, “Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them.”
DOJ Investigating Nvidia’s Practices?
Rumors of a possible investigation into Nvidia’s business practices have been swirling for weeks. According to Reuters, the DOJ has questioned tech firms about Nvidia’s approach to bundling hardware. Concerns are reportedly mounting about whether Nvidia makes it difficult for customers to switch to rival chipmakers. Further, the government is allegedly probing whether the company penalizes buyers who choose not to exclusively use its AI suite.
On September 3, Bloomberg reported that Nvidia was among the companies subpoenaed by the DOJ as part of a broader antitrust investigation. This report shook investor confidence, wiping out $278 billion of Nvidia’s market capitalization—the biggest single-day loss in the company’s history. Nvidia’s stock price plummeted 9.5% that day, closing at $108.
Stock Recovers Slightly Amid Denials
In response to the denial of the subpoena, Nvidia’s shares recovered slightly, gaining 0.46% in after-hours trading to reach $106.70. Prices briefly spiked to over $111, according to Google Finance. Despite the recent losses, Nvidia remains up a staggering 120.5% in 2024, driven by unprecedented demand for its AI chips.
The company’s performance reached a pinnacle in June when shares hit an all-time high of $131.88, thanks to soaring demand for AI-related hardware. However, Nvidia’s stock has fallen over 17% in the last five trading days, as antitrust scrutiny and concerns over its business practices dominate the headlines.
Legal Troubles Persist
Nvidia also faces a revived class-action lawsuit in the U.S. Supreme Court. The lawsuit claims that the company concealed over $1 billion in sales of its graphics processing units (GPUs) to cryptocurrency miners. Plaintiffs allege that CEO Jensen Huang misrepresented the volume of sales to the crypto sector during the 2017–2018 mining boom. If successful, the lawsuit could deal a significant financial and reputational blow to the tech giant.
As Nvidia dominates the AI hardware market, it finds itself in the crosshairs of regulators worldwide. Antitrust concerns are rising as governments scrutinize the power tech companies wield over emerging markets like AI. While Nvidia’s leadership in the sector remains strong, the increasing regulatory pressure and ongoing legal battles could impact the company’s future growth trajectory.
Nvidia’s response to these challenges will likely define its long-term position in the rapidly evolving tech landscape. For now, the company maintains its stance of winning on merit, but the antitrust spotlight could cast a shadow over its impressive rise.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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