A US lawmaker and anti-monopoly campaigners are pushing for an antitrust probe into chip firm Nvidia over concerns about its dominance of the artificial intelligence sector.
Progressive groups in the US and Democratic Senator Elizabeth Warren have pressed the Department of Justice to look into Nvidia’s business practices, amid an AI chips frenzy which has seen the firm’s value balloon to $3 trillion this summer.
Warren said: “Allowing a single company to effectively be the gatekeeper for the world’s AI future is dangerous and poses dire economic risks.”
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Demand Progress and nine other groups have urged antitrust chief Jonathan Kanter to take action, taking aim at Nvidia’s bundling of software and hardware, a practice that French antitrust enforcers have flagged as they prepare to bring charges.
“This aggressively proprietary approach, which is strongly contrary to industry norms about collaboration and interoperability, acts to lock in customers and stifles innovation,” the groups wrote.
In June, Reuters reported a deal was reached among US regulators that directs the Justice Department to oversee potential antitrust probes into Nvidia, while the Federal Trade Commission is looking at Microsoft and OpenAI.
An Nvidia spokesperson said the company spent billions of dollars developing AI-capable computing technology before demand existed, and is “committed to opening new markets and growth opportunities for our partner ecosystem.”
“Regulators need not be concerned, as we scrupulously adhere to all laws and ensure that Nvidia is openly available in every cloud and on-prem for every enterprise,” the spokesperson said. “We’ll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need.”
Nvidia has roughly 80% of the AI chip market, including the custom AI processors made by cloud computing companies like Google, Microsoft and Amazon.com.
Nvidia Cloud Provider Chips
The chips made by the cloud giants are not available for sale themselves but typically rented through each platform.
Excluding the cloud providers’ chips, Nvidia achieved nearly 100% market share. That domination helps the company report gross margins between 70% and 80%.
A spokesperson for the Department of Justice declined to comment.
Kanter said in an interview on CNBC on Friday, without discussing Nvidia specifically, that antitrust enforcers are concerned about areas where there are bottlenecks that companies could take advantage of to exclude rivals.
“We want a world where, one, there is room for investment and development and growth into new rivals and technologies,” he said.
Last year, Reuters reported that investments in the semiconductor industry were down considerably in the face of Nvidia’s overwhelming market share.
- Reuters with additional editing by Sean O’Meara
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