Nvidia is facing calls for an antitrust investigation from Sen. Elizabeth Warren, D-Mass., and several progressive groups over its dominance in the AI chip market. Controlling about 80% of the market share, Nvidia saw its market cap exceed $3 trillion earlier this summer. When excluding the cloud computing services provided by companies like Google, Microsoft, and Amazon Web Services, Nvidia’s market share nears 100%.
Warren, along with 10 progressive groups including Demand Progress, sent a letter to Justice Department antitrust chief Jonathan Kanter, urging an investigation into Nvidia’s business practices. They expressed concerns that Nvidia’s bundling of software and hardware for training generative AI models could stifle competition. “This aggressively proprietary approach…acts to lock in customers and stifles innovation,” the groups stated.
Warren emphasized the risks, stating, “Allowing a single company to effectively be the gatekeeper for the world’s AI future is dangerous and poses dire economic risks.”
Nvidia responded through a spokesperson, claiming the regulatory system is functioning correctly and promotes growth and investment in groundbreaking technologies. The company highlighted its contributions to AI and its commitment to sustainable computing, adding, “Regulators need not be concerned, as we scrupulously adhere to all laws and ensure that Nvidia is openly available in every cloud and on-prem for every enterprise.”
A Reuters report from June noted that U.S. regulators have assigned the Justice Department to oversee potential antitrust investigations of Nvidia, while the Federal Trade Commission will handle probes into Microsoft and OpenAI.
Amid this news, Nvidia’s stock fell over 6% by early afternoon Thursday, contributing to a broader market decline that saw the S&P 500 drop by about 1.5%. Despite this, Nvidia’s stock remains up over 127% year to date.
Featured Image courtesy of Tom’s Guide
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