Nvidia Faces DOJ Antitrust Probe, Stock Plunges Over 9%, Erasing $360 Billion in Market Value

Nvidia, a leading chipmaker, has been hit with a subpoena from the U.S. Department of Justice (DOJ) as part of an antitrust investigation into the chip industry. The DOJ is seeking evidence that Nvidia and other chip companies may have violated antitrust laws. This subpoena marks the first legally binding request for information in the probe.

Nvidia CEO Jensen Huang lost $10 billion in one day, his biggest single-day loss ever.

Nvidia currently holds around 90% of the AI chip market, giving it a dominant position in the sector. The investigation aims to determine if this market dominance has been achieved through unfair practices that stifle competition.

Following the news of the DOJ’s actions, Nvidia’s stock $NVDA plunged by over 9% during regular trading hours. This sharp decline wiped out $360 billion from the company’s market capitalization, making it the largest single-day loss of market value for any stock in history, especially after the after-hours drop. Nvidia’s market cap drop is part of a broader market trend that saw over $1 trillion in market capitalization erased across various tech stocks on the same day.

The antitrust investigation comes at a time when large-cap tech companies, including Nvidia, are already facing mounting regulatory scrutiny. With the DOJ’s investigation in motion, concerns over market concentration and competitive practices are once again in focus.

The outcome of this probe could have significant implications not just for Nvidia but for the entire tech industry, especially as AI chips become increasingly critical to future technologies.

This developing story has already sent shockwaves through the stock market, and investors are closely watching for further updates.

Key Takeaways:

– Nvidia received a DOJ subpoena as part of an antitrust investigation into the chip industry.

– Nvidia controls 90% of the AI chip market.

– Nvidia’s stock ($NVDA) fell over 9%, erasing $360 billion in market value, marking the largest single-day market cap loss in history.

– Over $1 trillion in market capitalization was wiped out from various tech stocks on the same day.

– The DOJ is investigating whether Nvidia and other chip companies have violated antitrust laws, raising concerns about market concentration and competition.

– $NVDA rally made many employees millionaires, but they’re too focused on work to celebrate. The company’s employee turnover rate has dropped from 5.3% to 2.7% since reaching its $1T valuation, creating around 25,000 employee millionaires.

As more details emerge, Nvidia and other large tech companies may face increased regulatory pressure, signaling a challenging period ahead for the tech industry.

Update

Nvidia’s response to the DOJ subpoena: “Our success is based on merit, as demonstrated by our benchmark performance and the value we deliver to customers, who have the freedom to select the solution that best suits their needs.”