U.S. progressive organizations and Democratic Senator Elizabeth Warren are calling on the Department of Justice (DOJ) to launch an investigation into Nvidia, citing concerns over the company's market dominance in the artificial intelligence (AI) chip sector.
In a letter sent this week, Demand Progress and nine other advocacy groups urged Jonathan Kanter, the DOJ’s antitrust chief, to scrutinize Nvidia's business practices. The company, which saw its market value soar to $3 trillion this summer due to high demand for its advanced AI chips, is accused of potentially anti-competitive practices related to its bundling of hardware and software.
The groups argue that Nvidia’s “aggressively proprietary approach” limits customer choice and stifles innovation by locking in clients and preventing collaboration and interoperability. This concern echoes issues raised by French antitrust regulators who are preparing to file charges against the company for similar practices.
According to Reuters, a recent agreement among U.S. regulators assigns the DOJ to oversee potential antitrust investigations into Nvidia, while the Federal Trade Commission (FTC) is focusing on companies like Microsoft and OpenAI.
In response to the calls for investigation, an Nvidia spokesperson defended the company, stating that it has invested heavily in AI technology before the current surge in demand and remains committed to supporting a wide range of partners. The spokesperson emphasized Nvidia’s adherence to all relevant laws and its openness in making its products available across various platforms.
Nvidia currently holds approximately 80% of the AI chip market, including chips custom-designed by major cloud computing providers like Google, Microsoft, and Amazon. Excluding these cloud-specific chips, Nvidia's share of the market is close to 100%, contributing to its high profit margins, which range from 70% to 80%.
Senator Warren voiced her concerns, describing Nvidia’s market control as “dangerous” and warning of significant economic risks. She supported the DOJ’s investigation into Nvidia's potentially anticompetitive practices.
The DOJ declined to comment, but Kanter indicated in a recent CNBC interview that antitrust regulators are vigilant about practices that could create bottlenecks and limit competition by excluding rival companies.
The scrutiny on Nvidia highlights growing concerns about the concentration of power in the AI sector and its implications for competition and innovation in the industry.
