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After an aberrant weakness in NVIDIA shares through much of yesterday's trading session that then culminated in another selloff once Bloomberg reported that the GPU manufacturer had been subpoenaed by the US Department of Justice (DOJ), the company has chosen to shrug off its reticence to comment on this matter by asserting that it has not received the talked-about subpoena.
$NVDA Nvidia Says 'We Have Not Been Subpoenaed' By Dept. Of Justice pic.twitter.com/m1bG7Rs7S0
— Benzinga (@Benzinga) September 4, 2024
To wit, NVIDIA has formally pronounced that it has "not been subpoenaed" by the DOJ. In its comments to various publications, the company has noted:
"We have inquired with the U.S. Department of Justice and have not been subpoenaed. Nonetheless, we are happy to answer any questions regulators may have about our business."
Well, if that's an accurate portrayal of this situation, why didn't NVIDIA come out in the open late yesterday or early morning today? After all, the GPU maker lost upwards of $280 billion in market cap on Tuesday, with most of those losses pegged on a select clique of investors who were presumably in the know, as per the prevailing chatter.
Here is my 7-and-a-half minutes talking about $NVDA and the @TheJusticeDept. A few points:
1/It's not illegal to hold a monopoly, it's to use that power to harm consumers. NVIDIA, holding 90+% of the datacenter GPU share in the most important AI sector, sends off red flares. I'm… https://t.co/ZsqTNJYAQF— Patrick Moorhead (@PatrickMoorhead) September 4, 2024
Of course, other industry commentators remain adamant that NVIDIA's aberrant losses on Tuesday were simply a function of the deteriorating economy. According to Patrick Moorhead, the CEO of Moor Insights, institutional investors "don't care until there's a ruling."
Frankly speaking, NVIDIA's lethargy in responding to the subpoena-related controversy has raised more questions than answered. Is it simply that the company has yet to physically receive a subpoena and that one might still materialize? We will likely get to know a lot more about this saga in the coming days.
As we noted yesterday, the DOJ investigators are reportedly looking into NVIDIA's purported practice of giving preferential treatment in terms of pricing and/or supply to customers who use its AI chips exclusively or deploy the company's complete systems, as per the reporting by Bloomberg. Do note that Huang has previously stated that NVIDIA prioritizes customers who deploy its products within its designated ready-to-go data centers, presumably in a bid to deter stockpiling.
The DOJ is also reportedly probing NVIDIA's acquisition of the maker of AI computing software, RunAI. According to DOJ officials, this acquisition can make it more difficult for customers to switch away from NVIDIA's offerings.
NVIDIA is attempting to become a one-stop shop for all things AI-related, which not only includes dedicated AI accelerators (chips) but also software-based solutions to train AI models as well as data center design optimization services, which aligns with the "AI factory" vision of the GPU manufacturer's CEO, Jensen Huang.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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