The US Department of Justice is launching two antitrust investigations into Nvidia. Nvidia’s market dominance is under fire, both due to a recent acquisition and due to practices with existing chips.

The US is launching two antitrust investigations against Nvidia. The US Department of Justice is taking issue with one specific incident and one more general one.

Specifically, the US is considering taking over the Israeli start-up Run:AI. Nvidia bought Run:AI in April for $700 million. The company specializes in GPU virtualization, an important technology that enables efficient use of GPU computing power in the server context. The takeover is being examined from the perspective that it would bring Nvidia closer to a monopoly position.

Malpractice

In general, the Americans are investigating Nvidia’s practices from its current market dominance following complaints from competitors. For example, the company would put pressure on cloud providers. Nvidia can do this in several ways thanks to the approved takeover of Mellanox in 2020.

Through Mellanox, Nvidia has developed a strong network portfolio that is used, among other things, to connect systems in clusters. According to the complaints, how much this network equipment costs depends on what customers want to do with it. If the goal is to build clusters with AMD hardware and not Nvidia chips, the price will suddenly rise.

refusal

Nvidia denies the allegations, saying it complies with all relevant laws. Nevertheless, the research should not come as a surprise. Nvidia holds an estimated 70 to even 95 percent of the market for AI training chips. With such dominance, the temptation to nip the competition in the bud can be great.