What’s going on here? Nvidia’s mailbox is usually full of chunky orders and adoration from investors – but this week, the US Department of Justice (DoJ) added subpoenas to the pile. What does this mean? The DoJ is seeking evidence to decide whether Nvidia has violated antitrust laws – in other words, used unfair tactics to restrict competition in the market. More specifically, regulators seem to believe that the chip company is making it hard for firms to switch suppliers, and punishing buyers with wandering eyes while rewarding loyal customers with special deals. The DoJ may give Nvidia’s proposed acquisition of RunAI a review, too. Unsurprisingly, the chip industry’s poster child says it’s done nothing wrong, and that it just can’t help having the best products on the market. Why should I care? For markets: Money can buy happiness, actually. Nvidia’s become a vital cog in the supply chain for tech titans like Microsoft and Meta, who drop over 40% of their hardware budgets on its specialized gear. And with a ton of tech companies scrambling to keep up, Nvidia’s sales have been doubling each quarter. In fact, Nvidia's profit this year is set to beat the total sales of its closest competitor, AMD. It’s safe to say that the chipmaker has enough cash to put up a fight, so the DoJ’s probe might not come to anything. But it might not take much for investors to panic. They sent Nvidia’s stock down nearly 10% on Tuesday, after all, spooked by underwhelming US economic data. The bigger picture: If it wasn’t for you meddling laws... It’s not just Nvidia: Google, Meta, and Apple have all been pulled aside by regulators recently. So it’s no wonder the biggest names in tech are antsy about the upcoming US election. The next president may be more or less forgiving about the whole “cornering the market” thing – and whoever it is will dictate the handling of social issues that indirectly affect the industry, too. |