Breaking News: U.S. Department of Justice Subpoenas Nvidia in Antitrust Probe - Bloomberg Report
The U.S. Department of Justice has escalated its investigation into Nvidia's antitrust practices with a subpoena, according to Bloomberg News. This move comes after the watchdog previously sent questionnaires and now has issued legally binding requests to the AI heavyweight. Other companies have also reportedly received subpoenas as part of the probe.
Officials are worried that Nvidia is creating barriers for customers to switch to other suppliers and is punishing buyers who do not exclusively use its AI chips. This latest development follows complaints from competitors about the chipmaker potentially abusing its market dominance, as reported by the Information last month.
The timing of the subpoena is crucial for AI-related companies as investors adjust their expectations for the technology amid concerns of overspending. Nvidia's recent quarterly forecast, which fell short of investor expectations, has further dampened optimism in the market.
Following the news, Nvidia's shares dropped 2.5% in extended trading on Tuesday after a 9.5% decline in the regular session. The company has not responded to requests for comment from Multibagger, while the Department of Justice has yet to provide a statement.
In conclusion, this investigation into Nvidia's antitrust practices could have significant implications for the company and the broader AI industry. Investors should closely monitor developments in this case as it unfolds, as it may impact Nvidia's market position and future prospects.