Nvidia CEO Jensen Huang spoke at Computex 2024 in Taipei on June 4, 2024. By Wednesday, the company’s shares had slipped 1% following a Bloomberg report that Nvidia received a Department of Justice (DOJ) subpoena concerning an antitrust investigation. This decline follows a nearly 10% drop on Tuesday, which wiped $279 billion off Nvidia’s market capitalization, with the stock also falling in post-market trading.
The DOJ probe, not yet at the formal complaint stage, questions whether Nvidia’s practices hinder switching to other AI chip suppliers. Nvidia dominates over 80% of the data center AI chip market, a sector it has led for years, preceding competitors AMD and Intel. The company’s rise is closely linked to its AI chip dominance, bolstered by its CUDA programming language, crucial for training advanced AI models like ChatGPT. Major customers include tech giants such as Microsoft, Alphabet, Meta, Amazon, and Tesla.
With its AI chips in high demand, Nvidia has introduced new enterprise software subscriptions and boosted its networking products, suggesting their value in optimizing the use of Nvidia chips. Recent chip versions even come pre-installed in Nvidia-designed server racks, signaling the company’s shift from parts supplier to systems provider.
Nvidia’s spokesperson asserted the company’s success is based on merit, highlighting benchmark results and customer value, while the DOJ has declined to comment.
This investigation comes amid Nvidia’s significant influence and growth in the AI chip industry, raising critical questions about competition and market dynamics.
Original Story https://www.cnbc.com/2024/09/03/nvidia-slides-in-post-market-trading-after-drop-wiped-out-300-billion.html
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