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Nvidia has experienced its largest single-day loss in market value, plummeting nearly $280 billion following an antitrust subpoena from the United States Department of Justice (DOJ). On September 3, Nvidia’s stock dropped 9.5% to $108, marking a record-setting decline in U.S. stock market history, according to Google Finance. The decline continued with a further drop to $105 in after-hours trading.
The sharp downturn in Nvidia’s stock comes in response to the DOJ’s recent actions against the company and several other tech firms. The DOJ's subpoena demands detailed information from Nvidia, signaling a potential escalation in its antitrust investigation. Previously, the DOJ had issued non-binding questionnaires to the company, but the subpoena now requires formal compliance.
The focus of the investigation is on allegations that Nvidia may be imposing restrictive practices on businesses, making it challenging for them to switch to other artificial intelligence (AI) and chip providers. Reports suggest that Nvidia might be penalizing customers who do not exclusively use its AI services.
In response to these claims, Nvidia has defended its practices. The company stated, “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” Nvidia CEO Jensen Huang clarified that the company prioritizes customers utilizing its products in ready-to-go data centers to avoid stockpiling and expedite installation.
Nvidia, founded in 1993, has grown to become the leading manufacturer of computer chips used in AI processes. Its market success has significantly outpaced rivals such as Intel and Advanced Micro Devices (AMD). As of now, Nvidia’s market capitalization stands at $2.65 trillion, making it substantially larger than its competitors.
The ongoing scrutiny from the DOJ and the resulting market impact highlight the intense scrutiny facing major tech firms, particularly those leading in rapidly growing fields like AI.
