The US Justice Department is set to open an antitrust investigation into Nvidia focusing on the company’s market conduct in the exploding AI field, according to sources that spoke to The New York Times and CNBC.
Nvidia has more than 90% of the market for GPUs that are considered vital in training models for Generative AI, but also inference work. AMD and Intel compete but do not have nearly the market size. The DoJ investigation on antitrust grounds would not be unusual given Nvidia’s market dominance, analysts said.
Nvidia declined to comment on the reports of investigations.
Nvidia charges $40,000 fo each H100 GPU in many cases, although they can reach far higher in price—assuming customers can actually gain access to them. Some large data centers built by private cloud providers have spent billions of dollars on GPUs for GenAI work in hopes of speeding up work on AI models and applications.
In addition to Nvidia, these news outlets have indicated the DOJ investigation of Nvidia would come in addition to Federal Trade Commission antitrust investigations of Microsoft and OpenAI over their market behavior in the AI field. Separately, Meta, Microsoft and Google have all been under prior federal investigations for anticompetitive and monopolistic practices in other technology markets. Microsoft and OpenAI have partnered on developing GenAI software, but more recently have begun developing AI acceleration processors as well.
Some in industry expect an investigation or support it
Adding Nvidia to the mix shows DoJ and FTC are trying to preempt companies from dominating the AI world, said Jack Gold, founding analyst at J. Gold Associates. “Competition is required if you want healthy markets that have a variety of potential solutions,”he said. “That’s how healthy competition grows capabilities for users.”
The investigation is probably to be expected, Gold said. And Patrick Moorhead, chief analyst at Moor Insights & Strategy agreed.
“Anytime there is a heavy concentration of companies in the industry who have so much power over so many important things like AI, the current administration will investigate it,” Moorhead said.
Alon Yamin, CEO of Copyleaks, an AI-based text analyst platform, said the antitrust probes by DoJ and FTC into the “AI giants is a positive move.” Yamin added in a statement, “While innovation is crucial, unchecked dominance by Nvidia, Microsoft, and OpenAI could stifle competition and limit access to the technology. A healthy AI ecosystem needs a level playing field that brings diverse voices to the table to ensure responsible development and innovation.”