Even Nvidia can't escape the government's crackdown on Big Tech
- Nvidia faces DOJ scrutiny over its $700 million acquisition of Israeli AI startup Run:ai.
- The investigation is part of a broader crackdown on Big Tech's market dominance.
Even Nvidia, which appears untouchable in 2024, may not be immune to the government's sweeping crackdown on the Magnificent Seven.
The chipmaker is in the Department of Justice's crosshairs amid a years-long antitrust sweep. On Thursday, Politico reported that the agency is investigating Nvidia's acquisition of an Israeli AI startup called Run:ai. Nvidia bought the company for a reported $700 million in April.
Run:ai, which has collaborated with Nvidia since 2020, allows AI developers to use only a fraction of the graphic processing units otherwise needed. Using fewer chips solved two problems: It makes buying GPUs cheaper, and reduces the need for chips at a time when demand is so high, there are global shortages.
US regulators are also investigating Nvidia in a wider probe. They have received complaints from competitors that Nvidia abused its dominance and pressured cloud providers to buy multiple Nvidia products, The Information reported on Thursday.
Nvidia stock prices have more than doubled since the start of the year. In June, it briefly became the world's most valuable company, because its chips are essential to the booming demand for AI.
Nvidia did not immediately respond to Business Insider's request for comment sent outside regular business hours.
"We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," Nvidia said in a statement to Reuters.
The DOJ's focus on Nvidia follows a series of other recent government investigations into Big Tech. The FTC has been examining deals more closely and pushing for more aggressive competition policies under the Biden administration.
Earlier this year, the DOJ sued Apple with an antitrust lawsuit that accused it of illegally maintaining a smartphone monopoly by "delaying, degrading, or outright blocking" other technology in the smartphone market.
In 2023, the FTC filed an antitrust complaint against Amazon, saying that the e-commerce giant stop rivals from lowering prices, and overcharges sellers, which stifles innovation and competition.
In 2022, the FTC repeatedly tried to block Microsoft's acquisition of Activision Blizzard, a leading video game developer. The agency said that the $69 billion deal would suppress competition in gaming.
The US government has also filed similar recent lawsuits against Tesla, Google parent Alphabet, and Meta.