September 06, 2024

Warren Throws Support Behind Department of Justice Probe Into AI Chipmaker Nvidia, Underscores Need for Comprehensive Investigation

Nvidia’s market power “has effectively made (it) the gatekeeper for the world’s AI future. But in carrying out this responsibility, Nvidia has shown that it is not committed to fair play.”

Text of Letter (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) wrote to Assistant Attorney General of the Antitrust Division at the United States Department of Justice (DOJ) Jonathan Kanter in support of the DOJ’s ongoing probe into Nvidia’s potentially anticompetitive behavior. Senator Warren, who has long called for robust antitrust enforcement to ensure competition and innovation in the tech sector, highlighted her support for the probe and detailed the extent of Nvidia’s market power and anticompetitive conduct.

“I welcome the reports that the Department of Justice (DOJ) has opened an antitrust investigation into Nvidia, whose blockbuster growth has made it one of the world’s largest companies. While this growth has been primarily driven by the recent AI boom, it has been supercharged by Nvidia’s use of anticompetitive tactics that have choked off competition and chilled innovation,” wrote Senator Warren.

In June 2024, Nvidia surpassed Apple to become the world’s second-most valuable company, spurred by its production of graphics processing units (GPUs) critical to machine learning technologies in the AI boom. Nvidia now controls an estimated 90% of the market for high-end AI chips, and 98% of the lucrative data center GPU market. However, Nvidia’s growing market share has enabled anticompetitive tactics that undermine competition and innovation. It has also led to a significant dropoff in the number of U.S. venture funding deals for AI chips.

In the new letter, Senator Warren details the threat posed by Nvidia’s anticompetitive behavior and applauds the DOJ’s decision to open a probe. Other countries, including the United Kingdom and the European Union, previously opened similar investigations into Nvidia’s conduct.

For example, the company locks customers in by bundling products and software — a practice that has already triggered antitrust scrutiny in France — resulting in Nvidia’s own programming software being the only system that is fully compatible with its chips. In a move that was ultimately blocked by the Federal Trade Commission, Nvidia has attempted to further raise barriers to entry by acquiring Arm Limited, the developer of essential chip architecture.

“Nvidia has shown that it is not committed to fair play,” wrote Senator Warren. “As Nvidia cements its dominance, venture funders are investing less in companies attempting to build competing chips. Indeed, the number of U.S. venture funding deals for AI chips fell approximately 80% between 2022 and 2023.”

Senator Warren also underscored the need for urgent action by regulators to strengthen competition, writing, “Without the intervention of U.S. regulators, the prospects of restoring competition in the semiconductor market are bleak. They will only grow bleaker as Nvidia approaches 100% ownership of the market, and as it begins pouring money into lobbying alongside the conventional Big Tech players to shape the contours of AI regulation and lock in its advantage.”

Senator Warren has been a longtime leader on antitrust and tech reform:

  • In August 2024, Senator Warren wrote to Tesla’s Board of Directors with concerns over CEO Elon Musk’s continued conflicts of interest and misappropriation of company resources, specifically his order that Nvidia redirect over 12,000 critical GPUs originally meant for Tesla to X instead.
  • In March 2024, Senators Warren and Amy Klobuchar (D-Minn.) along with 26 colleagues sent a letter to leadership of the House and Senate Appropriations Committees urging them to strike parts of the Commerce, Science, and Justice appropriation bill that would block the Antitrust Division’s ability to use the fees collected during its merger review process. 
  • In February 2024, Senator Warren delivered the keynote address at RemedyFest, where she called out Big Tech for their anti-competitive tactics that have led to market consolidation and record profits.
  • In July 2023, Senators Warren and Lindsey Graham (R-S.C.) unveiled comprehensive legislation that would rein in Big Tech by establishing a new commission to regulate online platforms in concert with FTC and DOJ.
  • In November 2022, Senator Warren sent letters to FTC Chair Lina Khan and Assistant Attorney General of the Antitrust Division at the United States Department of Justice Jonathan Kanter, calling for increased oversight of Big Tech expansion into the automotive industry.

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