- Nvidia subpoenaed by DOJ, escalating its antitrust investigation.
- Crypto prices fall in response to Nvidia’s legal troubles.
- Investor uncertainty grows over Nvidia’s role in AI and blockchain.
The current market enthusiasm over artificial intelligence (AI) has benefited both the tech sector and crypto. Both of these sectors seek to benefit from AI applications. However, the company that benefited the most from the AI craze is Nvidia.
Thanks to its virtual monopoly on microprocessors that will power future AI, Nvidia briefly became the most valuable company in the world. However, recent probes from US regulators are shaking the company and the crypto market.
DOJ Subpoenas Nvidia in Expanding Antitrust Investigation
The U.S. Department of Justice (DOJ) antitrust scrutiny of Nvidia caused a major downturn in the market. On Tuesday, September 3, subpoenas were issued to examine whether the company’s practices violate competitive laws. The main focus of the probe is Nvidia’s control over the AI chip market.
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As a result, Nvidia’s stock price fell sharply, losing $279 billion in market value in late trading the same day. The stock saw a 10% decline, falling from $116 to a low of $104. This is a significant decline, especially for established companies like Nvidia.
The DOJ probe did not just impact Nvidia. Both the tech market and crypto experienced similar declines. Following the news, Bitcoin dropped from $59.7k to a low of $56.2k.
The decline is likely due to Nvidia’s key role in blockchain, especially mining. Specifically, crypto miners use the powerful H100 chips for proof-of-work (PoW) mining. Without these chips, miners have to rely on less efficient alternatives.
Why DOJ Is Investigating Nvidia
The DOJ is investigating whether Nvidia is using anti-competitive practices to protect its monopoly in the AI and semiconductor markets. The agency suspects Nvidia may be forcing customers to use only its products, particularly in high-demand AI processors.
Nvidia is also suspected of offering preferential pricing to companies that exclusively use its chips. This practice unfairly disadvantages competitors and creates barriers to entry for smaller firms. Moreover, its decent acquisition of RunAI, a company that develops software for managing AI computing, raised concerns.
On its end, Nvidia states that its market dominance stems from its superior products. “Nvidia wins on merit,” the company claims and adds that benchmark comparisons with other chips prove this. It also stated that its customers are free to choose “whatever solution is best for them.”
On the Flipside
- Following the drop after the DOJ probe in Nvidia, Bitcoin rebounded to $58k.
- The DOJ’s investigation is part of a larger trend of antitrust in the tech sector. Meta, Amazon, and Google were also targets of this scrutiny.
Why This Matters
Nvidia’s AI processors are also essential for Bitcoin mining and affect the growing segment of AI-focused crypto projects.
Read more about Nvidia’s effect on AI crypto tokens:
NVIDIA’s Surge is Boosting AI Tokens: Will It Last?
Read more about Solana’s recent performance:
What’s Behind Solana’s Recent Volatility After Whale Sell-off?
