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US Progressive Groups and Senator Warren Urge DOJ Probe into Nvidia’s AI Chip Dominance

By  |  August 1, 2024

Progressive organizations in the United States, backed by Democratic Senator Elizabeth Warren, are calling on the Department of Justice (DOJ) to scrutinize Nvidia for potential antitrust violations. Their concerns center around Nvidia’s substantial control over the market for chips that are crucial to the rapidly expanding artificial intelligence (AI) sector.

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    According to Reuters, Demand Progress and nine other advocacy groups have penned a letter to Jonathan Kanter, the head of the DOJ’s antitrust division, requesting a thorough investigation into Nvidia’s business practices. This appeal comes as Nvidia’s market valuation soared to $3 trillion this summer, driven by the high demand for its chips, which power the sophisticated models used in generative AI.

    The letter criticizes Nvidia’s strategy of bundling software and hardware, a tactic also under scrutiny by French antitrust authorities who are preparing to bring charges against the company. “This aggressively proprietary approach, which is strongly contrary to industry norms about collaboration and interoperability, acts to lock in customers and stifles innovation,” the groups wrote, as reported by Reuters.

    Related: Nvidia Faces Global Regulatory Scrutiny Amid Antitrust Investigations

    In June, a Reuters report highlighted an agreement among U.S. regulators assigning the DOJ the task of overseeing potential antitrust probes into Nvidia, while the Federal Trade Commission focuses on Microsoft and OpenAI. This division of oversight underscores the growing regulatory attention on major players in the tech industry.

    Responding to these developments, an Nvidia spokesperson defended the company’s practices. “We have invested billions in developing AI-capable computing technology before there was a market demand. We are committed to creating new markets and growth opportunities for our partner ecosystem,” the spokesperson stated. “Regulators need not be concerned, as we scrupulously adhere to all laws and ensure that Nvidia’s technology is openly available in every cloud and on-premises for every enterprise. We will continue to support innovators across all industries and markets and are prepared to provide any information regulators require.”

    Nvidia currently holds approximately 80% of the AI chip market. This includes custom AI processors developed by major cloud computing companies such as Google, Microsoft and Amazon. Unlike Nvidia’s chips, those made by these cloud giants are not sold independently but are instead available for rent through their respective platforms.

    Source: Reuters