US Progressives Advocate for Nvidia Antitrust Investigation, According to Reuters

By Jody Godoy and Max A. Cherney

U.S. progressive organizations and Democratic Senator Elizabeth Warren are urging the Department of Justice to investigate Nvidia due to competition concerns, particularly regarding the company’s significant influence in the market for chips that are essential for the artificial intelligence sector.

Demand Progress, along with nine other advocacy groups, sent a letter to the Justice Department’s antitrust chief, Jonathan Kanter, requesting an examination of Nvidia’s business practices. This follows Nvidia’s market value reaching $3 trillion this summer, fueled by the soaring demand for chips needed to support complex AI models.

These groups, which oppose monopolistic practices and advocate for increased regulation of technology companies, criticized Nvidia’s strategy of bundling hardware and software—a method that has raised alarms among French antitrust authorities who plan to file charges.

The letter articulated that Nvidia’s “aggressively proprietary approach” contradicts established industry standards for collaboration and interoperability, effectively locking in customers and hindering innovation.

Reports from June indicated that a consensus was reached among U.S. regulators, assigning the Justice Department the task of supervising potential antitrust investigations into Nvidia, while the Federal Trade Commission is examining Microsoft and OpenAI.

In response, an Nvidia representative highlighted that the company invested billions in AI-capable computing technology prior to the surge in demand. The spokesperson emphasized Nvidia’s commitment to fostering new markets and opportunities for its partners, asserting that the company adheres closely to all legal requirements and ensures accessibility across various platforms.

Nvidia commands around 80% of the AI chip market, which includes custom AI processors provided by cloud computing companies. The chips produced by these cloud giants are generally not sold directly but offered for rent through their respective platforms.

When excluding the cloud providers’ chips, Nvidia approaches nearly complete market dominance, enabling the company to report gross margins of 70% to 80%.

Senator Warren expressed serious concerns about Nvidia’s market control, stating, “Allowing a single company to effectively be the gatekeeper for the world’s AI future is dangerous and poses dire economic risks. The DOJ is right to investigate Nvidia’s anticompetitive practices.”

A representative from the Department of Justice opted not to comment on the situation.

In an interview, Kanter discussed general antitrust enforcement issues, stressing the need to address bottlenecks that could allow companies to suppress competition.

He added, “We want a world where there is room for investment and development, allowing new rivals and technologies to emerge.”

Previous reports indicated a significant decline in investments in the semiconductor industry as a result of Nvidia’s substantial market share.