Nvidia Slips 10% As US DOJ Escalates Antitrust Probe With Subpoena

Nvidia was one of the worst-performing stocks in the US equity market today, wiping off nearly 10% of its value. After the closing bell, the stock has lost nearly 3%, suggesting that the investors are keeping a distance from the AI giant stock. Meanwhile, this comes amid a Bloomberg report that showed that the US DOJ issued a subpoena on the chipmaker, escalating its antitrust probe on the firm.

DOJ Escalates Nvidia Probe With Subpoena

The US DOJ has intensified its antitrust investigation into Nvidia by issuing subpoenas to the AI chip giant, signaling a new level of scrutiny. Previously, the DOJ had sent questionnaires to the chipmaker and other firms, gathering preliminary information.

However, the recent subpoenas mark a critical escalation, as they are legally binding requests that compel the AI giant to provide specific evidence related to the probe. According to a recent Bloomberg report, the DOJ’s investigation centers on the chipmaker’s dominance in the AI computing market.

Meanwhile, the report showed that antitrust officials are concerned that the AI firm is making it difficult for customers to switch to other suppliers. Besides, it suggests that the chipmaker may be penalizing buyers who do not exclusively use its AI chips, creating barriers for competitors.

These allegations raise the possibility of the DOJ moving closer to filing a formal complaint against the GPU maker, which could have far-reaching consequences for the company. The DOJ’s San Francisco office is leading the investigation, and investigators have been contacting other tech firms to gather further evidence.

This probe on the AI firms, which initially surfaced in June, has gained momentum, adding pressure on NVDA stock. Investors are growing wary of the potential regulatory challenges that could impact the firm’s market position and future growth.

NVDA Stock Dips

The Nvidia stock suffered a sharp decline following news of the DOJ’s escalated probe. The company’s shares were already under pressure, experiencing a significant rout on Tuesday. The latest developments have added to the uncertainty, prompting investors to reconsider their positions in the chipmaker.

As of writing, the NVDA stock was down nearly 3% to $105.81, after closing the session at $108, down 9.53% from its previous close. However, despite today’s drop, the firm’s stock has performed exceptionally well this year, more than doubling in value, thanks to Nvidia’s recent robust earnings.

Meanwhile, the DOJ’s concerns are centered around the company’s market power and its potential impact on competition. Officials believe the firm’s practices could be stifling rivals and restricting buyer choices, which would violate antitrust laws.

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Rupam Roy

Rupam, a seasoned professional with 3 years in the financial market, has honed his skills as a meticulous research analyst and insightful journalist. He finds joy in exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond conventional boundaries. His contributions encompass breaking stories, delving into AI-related developments, providing real-time crypto market updates, and presenting insightful economic news. Rupam’s journey is marked by a passion for unraveling the intricacies of finance and delivering impactful stories that resonate with a diverse audience.

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