The latest news reports that as part of an antitrust investigation, the major AI chip manufacturer Nvidia has received a subpoena from the US Department of Justice. This move has caused Nvidia’s stock price to plummet by about 10% on Tuesday, resulting in a market value loss of $279 billion, marking the largest single-day loss for a US listed company in history.
According to sources cited by Bloomberg, the Department of Justice had previously sent out investigative questionnaires to multiple companies, including Nvidia, and has now issued legally binding subpoenas requiring the recipients to provide information. This signals a further escalation in the investigation targeting this tech giant.
With the increasing importance of AI technology to economic strength and national security, acquiring AI capabilities has become a focal point of governments around the world.
Since becoming the world’s most valuable chip manufacturer and a leading player in the AI consumer boom, Nvidia has been subject to comprehensive and rigorous scrutiny by regulatory authorities.
Regulators have been investigating Nvidia’s acquisition of Israeli AI startup Run:ai, announced in April. They are also looking into whether Nvidia has provided preferential conditions or discounts to customers who specifically use its technology or purchase its entire system.
Antitrust officials believe that Nvidia has made it difficult for customers to switch to other suppliers and penalized buyers who do not exclusively use its AI chips.
Sources indicate that the investigation is being led by the Department of Justice’s San Francisco office. The Department of Justice has declined to comment on the matter.
In response, Nvidia stated that its market dominance stems from the quality of its products, as they offer better performance. The company said in a statement, “Nvidia wins on merit, reflected in our evaluations and the value we provide to customers, who can choose the solution that best suits them.”
After Bloomberg reported rumors about the subpoena on Tuesday, Nvidia’s stock price experienced a record drop and continued to decline after the market closed. On that day, Nvidia’s stock price plummeted by 9.53%, hitting a new low since August 9. The company’s market value evaporated by $278.9 billion, setting a record for the largest single-day market value loss by a US enterprise.
The drop in Nvidia’s stock price also led to a decline in the entire chip sector. The Philadelphia Semiconductor Index fell by 7.7%. Taiwanese semiconductor company TSMC’s ADR dropped by 6.5%, AMD by 7.8%, Intel by 8.8%, and Broadcom by 6.1%.
On August 28, Nvidia released its financial report for the second quarter of the fiscal year 2025, surpassing market expectations in revenue and earnings per share (EPS). However, the company’s stock price plummeted by 8% after market hours and continued to decline by 6.38% in subsequent trading days.
Nvidia was founded in 1993 and is headquartered in Santa Clara, California, USA, primarily specializing in the design and sale of graphics processing units (GPUs) as a fabless semiconductor company. After 2015, the company’s valuation soared, with its stock price increasing by 70 times in six years. In February of this year, its valuation reached $2 trillion, surpassing $3 trillion in market value within just about three months.