AI: Nvidia Under Federal Investigation! Chip Empire Threatened?
The semiconductor giant Nvidia is under investigation by the United States Department of Justice (DOJ) for alleged anti-competitive practices. This investigation was triggered following complaints from competitors, who accuse Nvidia of abusing its dominant position in the market for artificial intelligence (AI) chips.
AI: Nvidia under investigation for anti-competitive practices in the United States!
The investigation against Nvidia aims to determine whether the company pressured cloud computing solution providers (cloud computing) to purchase several of its products. Additionally, it is alleged that Nvidia charges higher prices for networking hardware if customers wish to buy AI chips from its rivals, such as Advanced Micro Devices (AMD) and Intel.
Nvidia, which holds approximately 80% of the AI chip market, has seen demand for its products explode with the rise of generative AI, especially after the release of the ChatGPT application last year. This dominant position has raised concerns not only in the United States but also in Europe, where the French Competition Authority is also conducting an investigation into similar practices.
Nvidia drops after this announcement
Nvidia’s shares dropped by 3.6% in pre-market trading on Friday following the announcement of the investigation. A spokesperson for the AI company stated that the company would fully cooperate with the regulators and provide all requested information. “We compete based on decades of investment and innovation, adhering scrupulously to all laws, making Nvidia openly available in every cloud and on-premises for every company, and ensuring that customers can choose the solution that best suits them,” he added.
This investigation occurs in a context of increased scrutiny of major tech companies by regulators worldwide. American progressive groups and Democratic Senator Elizabeth Warren have urged the DOJ to investigate Nvidia for competition reasons. These groups oppose monopolies and encourage stricter oversight of tech companies, especially those based on AI.
The investigation into Nvidia could have significant repercussions on the semiconductor market and the AI industry. The results of this investigation will be closely watched by investors and regulators, as they could influence Nvidia’s future business practices and its acceleration program.
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