Nvidia’s AI acquisition faces DoJ scrutiny
Nvidia, which holds an estimated 90% of the market for high-end AI chips, is also under investigation for potentially anticompetitive sales practices.
An Israeli start-up, Run, is under scrutiny as the US Justice Department investigates its acquisition by Nvidia on antitrust grounds. The $700 million deal, announced in April, raises concerns over Nvidia’s growing dominance in the AI chip market. Run’s technology, which optimises graphics processing units (GPUs), has become highly valuable amid soaring demand for these chips.
Nvidia, which has seen profits surge due to its AI-adapted chips, is now under investigation for potentially anti-competitive practices. Regulators fear that the company’s control over high-end AI chips and related software could stifle competition and innovation in the AI industry. Nvidia spokesperson Mylene Mangalindan defended the company, emphasising its commitment to competition and innovation.
Why does this matter?
The Justice Department’s investigation is part of a broader regulatory effort to address potential monopolistic behaviours in the AI sector. To ensure fair competition, the DoJ and the Federal Trade Commission are examining the business practices of leading AI companies, including Nvidia and Microsoft.
The investigation into Nvidia’s acquisition strategy and business practices reflects broader concerns about market concentration in the tech industry. As regulators continue to scrutinise AI investments and mergers, the outcome of these investigations could significantly impact the future landscape of the AI market.
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