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Nvidia Subpoenaed in Escalating DOJ Antitrust Probe

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Bloomberg Sep 3 21:44 · 21.3k Views

The US Justice Department sent subpoenas to Nvidia and other companies as it seeks evidence that the chipmaker violated antitrust laws.

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Transcript

  • 00:00 The US Justice Department has sent subpoenas to NVIDIA and other companies
  • 00:05 seeking evidence that the chip maker violated antitrust laws.
  • 00:08 This is according to people familiar with the investigation that our Bloomberg reporters have spoken to.
  • 00:14 We should point out we are still awaiting comment from NVIDIA and the DOJ itself.
  • 00:18 Joining us right now is Ian King, Bloomberg News reporter covering covering the semiconductor space forest.
  • 00:24 Ian, talk to us a little bit about what that means when they say they're seeking evidence
  • 00:29 of antitrust trust violations.
  • 00:31 What exactly are they sort of hinting at
  • 00:34 right in, in this particular case,
  • 00:36 we've reported a while ago that there was questionnaires going out that they were just sort of
  • 00:41 asking customers, asking competitors, you know, what was going on in the market.
  • 00:46 The fact that this has gone to the subpoena stage, the
  • 00:49 legally enforceable request for information
  • 00:53 is usually a sign of of an escalation
  • 00:56 in terms of what they might be looking for.
  • 00:59 Things like bundling, things like,
  • 01:02 you know, taking action, perhaps
  • 01:04 punitive action against companies
  • 01:07 that don't use it exclusively, that perhaps look at other
  • 01:11 alternative suppliers.
  • 01:12 Because as we know, NVIDIA has a very, very tight
  • 01:15 control over the supply chain for a particularly important product at this point.
  • 01:20 And when we talk about the DOJ making inquiries into these kinds of issues in the past, you and Leah Nilan reported that the US opened
  • 01:29 antitrust investigations into
  • 01:31 both Microsoft and NVIDIA at the time.
  • 01:33 Did we have a good sense of what it was specifically that they were looking into?
  • 01:38 Yeah.
  • 01:38 I mean,
  • 01:39 in general,
  • 01:40 every government, every regulator around the world is looking at AI as as as being
  • 01:45 not only extremely
  • 01:46 fast growing, but also extremely important with all kinds of economic and indeed security implications.
  • 01:53 So our understanding at the time was, you know, there were
  • 01:56 things like Nvidia's purchase of
  • 01:59 a small AI startup.
  • 02:00 There was obviously Microsoft's relationship with open AI that all of these things that, you know,
  • 02:06 the sense was that regulators wanted to get ahead of this, didn't want anything to become too entrenched before they had a close look.
  • 02:13 Let me ask you a kind of a dumb question, Ian, But but when when you say this idea that there's concern here that NVIDIA is making it hard to switch to other suppliers or penalizing buyers that don't
  • 02:23 views
  • 02:24 exclusively Nvidia's products.
  • 02:27 Are there competing products out there?
  • 02:28 I mean, at least in mass that these companies would even be able to go to?
  • 02:32 Yeah, No, that's a very good question, Romaine.
  • 02:34 I mean, clearly NVIDIA is, is way ahead.
  • 02:37 But you got to bear in mind
  • 02:39 company like Amazon AWS,
  • 02:41 for example, and this is just an example.
  • 02:43 This doesn't have any relevance to our reporting.
  • 02:45 They do their own networking.
  • 02:46 They do their own
  • 02:48 servers.
  • 02:48 So NVIDIA
  • 02:50 as, as we know, supplies all of those things, networking
  • 02:54 servers and the chips itself.
  • 02:56 So what
  • 02:58 could be under investigation, what we believe is under investigation is the relationship, you know, between
  • 03:03 the supply given to those that aren't exclusive uses of its stuff.
  • 03:08 And of course, AMD is in the market as well with accelerators.
  • 03:11 Ian, with your decades of experience covering semiconductors both in Asia and in the US,
  • 03:16 you've seen this happen before where the government takes a closer looks and starts
  • 03:20 sending some peanuts.
  • 03:21 How do you expect this?
  • 03:22 What do you expect is the next step?
  • 03:24 What will you be looking for in terms of how quickly this might move?
  • 03:28 That is something that's, you know, difficult to say.
  • 03:31 What we can say is that clearly regulators are very keen to have a look
  • 03:36 at this particular area and to act quickly before it becomes entrenched like we saw in the past with certain Microsoft products,
  • 03:44 like with Google search, years down the line, they start to take a look at it.
  • 03:47 This one is feels much more
  • 03:50 on point and abrupt and A
  • 03:51 and an effort to to sort of get involved right at the beginnings almost of an industry.