Report: DOJ Begins Probe Into Nvidia Contracts and Partnerships

American regulators are reportedly probing whether tech giants are abusing their AI marketplace position.

Among these companies under probe is Nvidia, the Wall Street Journal (WSJ) reported Sunday (Sept. 8). Sources tell the news outlet that the Department of Justice (DOJ) has already contacted the company — which owns more than 80% of the artificial intelligence (AI) chip market — to discuss the terms of its contracts and partnerships.

Those sources said the probe is in its initial stages, and the DOJ attorneys have yet to subpoena Nvidia for internal documents. Nvidia said last week it hadn’t received a subpoena, following news reports that it had. The DOJ could issue a subpoena in the months to come if it determines a more detailed investigation is warranted, the sources said.

Reached for comment by PYMNTS, a Nvidia spokesperson offered this statement:

“NVIDIA wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.  We compete based on decades of investment and innovation, designing GPU, CPU, networking, and software for accelerated computing and AI, scrupulously adhering to all laws, and making NVIDIA openly available in every cloud and on-prem for every enterprise.”

The DOJ’s efforts come amid an investigation by the Federal Trade Commission (FTC) into AI investments by the likes of Amazon, Google and Microsoft which launched earlier this year.

The WSJ notes that federal regulators had been reluctant to put much pressure on tech companies, something that critics from both the left and right have said let a handful of giant companies become too powerful. This has helped bring about a more aggressive antitrust enforcement stance under President Joe Biden, the report argues.

The DOJ “would say, ‘We’ve watched enough Big Tech to know that we want to kick the tires,’” Randal Picker, a law professor at the University of Chicago, told the WSJ. “You are allowed to get market power, you’re allowed to have it. The question is always, how do you exercise?”

In other AI-related news, PYMNTS spoke last week with Shoab Khan, chancellor of the Sir Syed CASE Institute of Technology, about the role of AI in commerce in the wake of artificial intelligence startup Safe Superintelligence’s $1 billion funding round.

Khan told PYMNTS that AI in commerce has limitations:

“This depends on accurately modeling data probability distribution. In cases where data doesn’t follow a clear distribution or depends on many factors — some of which are difficult to measure, such as predicting bitcoin prices — AI’s effectiveness is limited.”

But in spite of challenges, there is reason to be optimistic about AI’s potential in business, he added.

“I see substantial advantages for investors in supporting AI for decision-making in commerce by building complex models, incorporating all relevant factors and data, and reshaping the role of human oversight and trust,” Khan said.