DoJ launches probes as AI antitrust storm clouds gather round Nvidia

US regulator reportedly not happy about Run:ai buy... nor industry dominance

Updated The US Department of Justice has started an investigation into Nvidia's acquisition of Run:ai, a startup offering orchestration tools for AI workloads.

The news follows calls from pressure groups for the DoJ to look into the company's market dominance, plus earlier reports that the GPU giant would likely face a probing from the Feds and potentially the EU competition watchdog as well.

According to reports, the DoJ is looking into Nvidia's purchase of Run:ai, an Israeli company that develops a Kubernetes-based workload management and orchestration platform for AI processing jobs, amid concerns it could further entrench the Santa Clara-based outfit's position in training AI models.

The Justice Department declined to comment.

The GPU supremo announced the acquisition of Run:ai back in April, in a deal said to be valued at roughly $700 million. This is peanuts to Nvidia, of course, which briefly became the world's most valuable company in June with a market capitalization of $3.335 trillion.

But reports suggest that the DoJ is also investigating allegations that Nvidia has been abusing its market dominance in the GPU accelerators that are used for AI model training. It is not clear if this would constitute a second, possibly separate probe.

According to The Information, Justice Department officials have been in contact with some of Nvidia's rivals, including AMD and some AI chip startups, in order to gather information about the complaints.

Citing unnamed sources, it says that the allegations include that Nvidia threatened to punish customers that also buy rival products, as well as concerns about its recent acquisition of startups – such as Run:ai – that consolidate its grip on the software AI developers use.

Such punishments are said to include charging more for high-performance networking gear if customers plan to buy AI accelerators from competitors instead of Nvidia.

Some kind of investigation into the chip company's apparent dominance of the AI accelerator market has been on the cards for a while. Nvidia is arguably a monopoly player, said to have an 88 percent share of the GPU market, according to some estimates.

Just this week, a number of advocacy groups submitted a letter to the DoJ urging it to carry out an antitrust probe into Nvidia, accusing it of abusive monopolistic business practices and saying the corporation was in a position to crowd out competitors and set global pricing.

Earlier this year there were reports of pending investigations into anti-competitive behavior in the burgeoning and lucrative AI industry, with the DoJ said to be taking the lead on scrutinizing Nvidia, while the Federal Trade Commission (FTC) probed generative AI developer OpenAI and its relationship with Microsoft.

The DoJ and the FTC both declined to comment at that time.

French regulators are also reported to be preparing charges against Nvidia over alleged anti-competitive practices.

Last month, the EU's Competition Commissioner, Margrethe Vestager, said that the European Commission had concerns over Nvidia's apparent dominance of the GPU market, and had been in contact with the company. However, she stated that things were at a preliminary stage and nothing that could be considered regulatory action was yet on the cards. ®

Updated to add on August 5:

A Nvidia spokesperson has been in touch to comment: "Nvidia wins on merit, as reflected in our benchmark results and value to customers. 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."

They added: "We'll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need."