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Following a noticeable drop in NVIDIA’s stock during a significant portion of yesterday’s trading, exacerbated by Bloomberg’s report of a subpoena from the U.S. Department of Justice (DOJ), the company has decided to publicly address the situation. NVIDIA has stated that it has not actually received the mentioned subpoena.
$NVDA Nvidia Claims ‘We Have Not Been Subpoenaed’ By Dept. Of Justice pic.twitter.com/m1bG7Rs7S0
— Benzinga (@Benzinga) September 4, 2024
NVIDIA has officially stated that it “has not been subpoenaed” by the DOJ. In correspondence with various media outlets, the company commented:
“We have reached out to the U.S. Department of Justice and confirmed there has been no subpoena issued. Nevertheless, we are open to addressing any inquiries regulators might have regarding our operations.”
If this claim holds true, one might wonder why NVIDIA didn’t address the issue earlier in the day. After all, the GPU giant saw a staggering decline of about $280 billion in market capitalization on Tuesday, largely attributed to actions of select investors who seemed to possess prior knowledge, according to various sources.
In my brief discussion about $NVDA and the @TheJusticeDept, I noted:
1/ Holding a monopoly isn’t unlawful; it’s the misuse of that power that harms consumers. NVIDIA’s dominance with over 90% of the data center GPU market in the vital AI sector raises alarms. I’m… https://t.co/ZsqTNJYAQF— Patrick Moorhead (@PatrickMoorhead) September 4, 2024
Conversely, some analysts argue that NVIDIA’s sudden stock drop was simply a reflection of current economic challenges. Patrick Moorhead, CEO of Moor Insights, mentioned that institutional investors typically remain uninterested until there is a formal ruling.
The delayed response from NVIDIA regarding the subpoena speculation has inevitably led to further inquiries. Could it be that the company is yet to receive an official subpoena, leaving the possibility of one being issued in the future? We may uncover more details about this ongoing situation shortly.
As mentioned previously, DOJ investigators are reportedly scrutinizing NVIDIA for allegedly favoring certain customers by offering exclusive pricing or supply arrangements for those who utilize its AI chips or fully implement its systems. Notably, Huang has indicated that NVIDIA prioritizes clients operating within its approved data centers, likely as a strategy to prevent stockpiling.
Additionally, the DOJ is investigating NVIDIA’s recent acquisition of RunAI, a company specializing in AI computing software. Officials believe this move could hinder customers from easily transitioning to alternative suppliers.
NVIDIA aims to establish itself as an all-encompassing hub for AI technologies, which encompasses not just specialized AI chips but also software solutions for training AI models and optimizing data center designs, aligning with CEO Jensen Huang’s vision of creating an “AI factory.”