NVIDIA may face antitrust review by the US Department of Justice, exacerbating stock price volatility

According to the financial news app Zhitong Finance, it was reported that NVIDIA (NVDA.US) is facing scrutiny from the U.S. Department of Justice due to its planned acquisition of the startup company Run:ai, which may involve antitrust issues. Additionally, sources revealed that the U.S. Department of Justice is also investigating NVIDIA's business practices because the company holds up to 90% market share in the high-end artificial intelligence (AI) chip market. NVIDIA may have too much power in the field of artificial intelligence, which has raised concerns from antitrust regulatory agencies.

In April of this year, NVIDIA announced its plan to acquire the Israeli company Run:ai. Run:ai enables multiple workloads to run in parallel, reducing the number of GPUs needed to complete tasks and making AI chips more efficient.

NVIDIA stated that they will provide regulators with any information they may need.

A spokesperson for NVIDIA said, "We will continue to support ambitious innovators in every industry and market, and are willing to provide regulators with any information they may need."

The spokesperson added, "NVIDIA wins on merit, reflected in our benchmark results and the value we bring to customers." "Our competition is based on decades of investment and innovation, strict compliance with all laws, providing NVIDIA's public services for every enterprise in cloud and on-premises deployments, and ensuring that customers can choose the solution that best suits them."

Last week, reports surfaced that NVIDIA's $700 million acquisition of Run:ai was put on hold due to a lengthy regulatory review.

In the same month that NVIDIA announced the acquisition of Run:ai, the company also acquired another Israeli startup company, Deci, which focuses on improving AI models to enhance operational efficiency.

On July 23, the U.S. Federal Trade Commission, along with the U.S. Department of Justice, antitrust agencies, and European regulatory authorities, issued a joint statement on competition issues related to generative AI basic models and products.

The Federal Trade Commission stated in the declaration, "All four antitrust enforcement agencies in the joint statement commit to remaining vigilant about potential competition issues and are determined to use existing powers to prevent strategies that could undermine fair competition or lead to unfair or fraudulent practices in the AI ecosystem."

It is reported that NVIDIA's stock price experienced significant volatility this week. Matt Maley, Chief Market Strategist at Miller Tabak + Co., stated that the sharp fluctuations in NVIDIA's stock price reflect investors' uncertainty about the future prospects of tech stocks. On one hand, they are concerned that the massive investments by tech giants in artificial intelligence may not yield returns as expected, while on the other hand, they fear missing out on the rise of tech stocks.

As of Thursday's close, NVIDIA fell by 6.67% to $109.21