Search Here

Democratic Senator Elizabeth Warren and US progressive organizations are calling on the Department of Justice to probe Nvidia's "concerning" control over the AI chip market.

According to Reuters, the groups, including Demand Progress, recently sent a letter to DOJ antitrust chief Jonathan Kanter, focusing on the company's potential anticompetitive practices.

Earlier this year, VCPost reported that Nvidia's market value surged to $3 trillion, driven by the high demand for chips capable of powering advanced AI models.

Nvidia Potentially Violating Antitrust Law

The letter from the progressive groups argued that Nvidia's bundling of software and hardware stifles competition and innovation and criticized their "aggressively proprietary approach," which they believe locks in customers and discourages collaboration and interoperability within the industry.

French antitrust regulators have also noted this practice, indicating possible charges.

Nvidia currently holds about 80% of the AI chip market, with the remaining share primarily covered by custom AI processors developed by cloud giants like Google, Microsoft, and Amazon. These cloud companies typically offer their chips for rent rather than sale, making Nvidia's effective market share nearly 100% outside of cloud provider offerings.

This dominance has allowed Nvidia to achieve gross margins between 70% and 80%, raising concerns about the company's market control.

Senator Warren cited the potential dangers of allowing a single company to dominate the AI future, citing economic risks and the need for regulatory oversight.

While a spokesperson for the DOJ declined to comment, Kanter noted that antitrust enforcers are closely watching industries with bottlenecks that could be exploited to exclude competitors.

Tags

Nvidia