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Justice Dept. Investigates Nvidia Deal With Groq

The Justice Department is examining whether the tech giant sought to sidestep antitrust scrutiny.

Justice Dept. Investigates Nvidia Deal With Groq
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The Justice Department is investigating whether Nvidia tried to skirt antitrust scrutiny of a deal it struck with the artificial intelligence chipmaker Groq last year, according to two people with knowledge of the inquiry.

Groq the deal at the time as a “nonexclusive licensing agreement” that gave Nvidia access to Groq’s chips, which are custom-built for running A.I. As part of the arrangement, Groq’s chief executive, Jonathan Ross, and its chief operating officer, Sunny Madra, joined Nvidia.

A.I. companies have struck numerous deals that involve licensing technology and hiring top employees from other companies without completing an outright acquisition. But those arrangements often evade automatic government reviews — common for traditional mergers and acquisitions — that determine whether a deal would harm competition.

Government officials have considered whether these deals should receive more scrutiny while they grapple with the way a small number of companies have consolidated power over A.I.

The Justice Department opened the investigation into the Groq deal shortly after it was announced in December and has sent Nvidia a formal demand for information about it, one of the people said. If the Justice Department does find fault with the way Nvidia handled the deal, the agency may fine the company, the two people said. It would probably not require the deal to be undone, they added.
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The Groq 3 chips on display at the company’s GTC conference in San Jose, Calif. Credit...Max A. Cherney/Reuters

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Reported by https://www.nytimes.com/by/lauren-hirsch · Syndicated via official news feed

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