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A week after reporting another record quarter, chipmaker Nvidia NVDA has reportedly been subpoenaed by the U.S. Department of Justice over complaints that it is violating antitrust laws.
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The Justice Department has also subpoenaed other companies for evidence after initially sending questionnaires about Nvidia’s business practices, Bloomberg reported, citing unnamed people familiar with the matter.
In June, the Justice Department and the Federal Trade Commission reached a deal to carry out antitrust investigations into Nvidia and fellow artificial intelligence industry leaders Microsoft and OpenAI.
U.S. officials are reportedly concerned by complaints that include how Nvidia has made it difficult for customers to switch chip providers. Nvidia and the Justice Department both declined to comment.
The Department of Justice reached out to the chipmaker’s competitors, including Advanced Micro Devices and AI chip startups, to gather information, including allegations of threatening customers who buy products from competitors, as well as Nvidia’s recent acquisitions of AI software startups, The Information reported in August, citing unnamed people familiar with the matter. Some of Nvidia’s customers fear it will charge a higher price for its chips, or even restrict the number of chips it will sell, if a customer is also buying chips from competitors, customers’ employees told The Information. Justice Department officials were reportedly investigating whether the chipmaker had pressured some of its customers, including cloud providers that rent servers powered by Nvidia’s chips to developers, to buy more of the company’s technology.
Meanwhile, Nvidia’s shares have taken a hit since its second-quarter earnings report. The chipmaker’s shares were down around 9.5% at the market close on Tuesday, losing a record $279 billion. Its stock was down around 2% in after-hours trading. However, Nvidia’s shares are up around 124.2% so far this year.