Wednesday, September 4th 2024
DOJ Issues Subpoena to NVIDIA as Antitrust Probe Intensifies
The U.S. Department of Justice has stepped up its probe into NVIDIA and several other companies in the hopes of gaining evidence that NVIDIA could have violated antitrust laws. The DOJ moved from sending questionnaires to issuing subpoenas requiring recipients to provide more information. This puts the government one step closer to potentially filing a formal complaint. Antitrust officials are concerned that NVIDIA might be making it difficult for customers to switch to other suppliers and could be penalizing those who don't exclusively use its AI chips, according to sources familiar with the investigation.
The probe, which first came to light in June via Bloomberg, has seen investigators reaching out to other tech companies for information. The DOJ's San Francisco office is leading the inquiry, though the department has declined to comment publicly on the matter. In response to the investigation, NVIDIA said in an emailed statement that its market dominance is due to the superior quality and performance of its products. "NVIDIA wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them".
NVIDIA, which has become the world's most valuable chipmaker and a major player in the AI boom, has attracted regulatory scrutiny as its sales have surged, surpassing former industry leaders like Intel.
As part of the DOJ's probe, regulators are also looking into NVIDIA's acquisition of RunAI, a company that develops software for managing AI computing. There are concerns that this acquisition could make it harder for customers to move away from NVIDIA's chips. Additionally, investigators are examining whether NVIDIA offers preferential pricing and supply terms to customers who exclusively use its technology or purchase complete systems.
Beyond this specific investigation, NVIDIA's business practices are facing broader regulatory questions, especially as access to AI capabilities becomes increasingly crucial to economic strength and national security worldwide.
Source:
Bloomberg
The probe, which first came to light in June via Bloomberg, has seen investigators reaching out to other tech companies for information. The DOJ's San Francisco office is leading the inquiry, though the department has declined to comment publicly on the matter. In response to the investigation, NVIDIA said in an emailed statement that its market dominance is due to the superior quality and performance of its products. "NVIDIA wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them".
As part of the DOJ's probe, regulators are also looking into NVIDIA's acquisition of RunAI, a company that develops software for managing AI computing. There are concerns that this acquisition could make it harder for customers to move away from NVIDIA's chips. Additionally, investigators are examining whether NVIDIA offers preferential pricing and supply terms to customers who exclusively use its technology or purchase complete systems.
Beyond this specific investigation, NVIDIA's business practices are facing broader regulatory questions, especially as access to AI capabilities becomes increasingly crucial to economic strength and national security worldwide.
36 Comments on DOJ Issues Subpoena to NVIDIA as Antitrust Probe Intensifies
Back in the days of Netburst, PC builders would start looking at AMD chips. And then Intel would walk in and ask: how much business do you think you can get from AMD? About 10%. Ok, what if we gave you a 10% discount, so for every CPU you already get from us, you get the one you would get from AMD for free?
What Intel offered was just a discount, which isn't usually even frowned upon. It's all legalese from there.
The simplest solution for a company too large and powerful is to forcibly break it up.
People have forgotten that in the year 1776, when the USA was founded (or at least, we declared our independence), companies were an act of congress. Each company had to be argued at Congress and proven before our representatives that the companies were worth creating. From the start of our country, the idea was that companies should be first-and-foremost, to the benefit of Americans.
Today, we have a more Libertarian slant (closer to the 1870s period), where we let companies go free and do whatever they like. But politics changes from decade to decade. Eventually, the country will once again realize that we can enforce laws, breakups and enact changes with a mere stroke of the pen to improve ourselves and the place we live in. Antitrust issues are just that. FBI may initiate them, but in our political system, they need our moral support for lasting change. People are scared of changing today's society, to a detriment. But the powers are always there. They've just been forgotten.Its not really about the law per se. We have plenty of laws ready to challenge and breakup monopolies. Its that our country is largely afraid to use those laws in today's politics.
The first step, politically speaking, is to get everyone to agree that the #1 purpose of US Companies should be to benefit Americans. If a company is no longer useful (or worse: they're actively harming innovation or hampering us), then we need to think about how to reorganize those troublesome companies. Maybe even the "meta" argument is to teach today's voters and today's population that companies can be harmful to us AND we actually have laws + regulations that can fix those problems (when applied correctly).
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That being said: FBI hasn't filed a case yet. FBI is just gathering evidence. We don't know what NVidia has done to catch the FBI's attention. And we might never know.Bug knows what's up, but I think bug's post needs a bit more context.
www.amd.com/en/legal/notices/antitrust-ruling.html
This "discount move", bug described was determined to be an antitrust issue. Intel was then forbidden from doing that again.
The reason that power is not exercised more is not that it's forgotten about. It's because it's very risky to use. After all it's infinitely easier to tear stuff down than it is to build it up.
Another reason is context: do you want to go up against (for example) Chinese juggernauts, with state-backing with only small companies, all at other's throat? Would that benefit Americans more?
The correct move in the 00s was not to breakup Intel, but as you've seen... just issue an order saying that Intel isn't allowed to offer anticompetitive discounts that harm AMD anymore. And because of that, AMD survived and became a more innovative company two decades later. (Also force Intel to give a $Billion+ to AMD for damages).
I think that we all can agree that if AMD was destroyed in the 00s because of Intel's discounts... our country would be in a worse spot today. Relative to "Chinese Juggernauts" or not, China doesn't matter in the discussion at all. Protecting AMD from Intel's anticompetitive behavior is simply better for us regardless of what the future has to offer. And we all know how close AMD came to bankruptcy, just a little bit more anticompetitive behavior from Intel would have probably killed them.
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The only way we keep innovating as a country is by preventing the top-dogs in our country from preventing innovation. Eventually Intel takes a step back (like today), and we will be happier for having other investments in other smaller companies (like AMD) who can step in and pickup the slack.
Today, NVidia is the top dog in GPUs and advanced accelerators (like AI compute). There's also a huge number of competitors to NVidia, not just AMD for GPUs, but also plenty of Tensor chips, etc. etc. etc. We need to ensure that these other ideas and companies have a fair shot at the market.