Nvidia’s OpenAI Acquisition: A $100 Billion Deal with Antitrust Implications
Nvidia: According to analysts, the $100 billion alliance between top artificial intelligence firm OpenAI and dominant AI chipmaker Nvidia (NVDA.O) may offer both businesses an unfair competitive edge.
The action highlights the growing financial overlap between the several tech behemoths creating cutting-edge AI systems and the possibility that fewer and fewer major firms may be able to fend off smaller competitors.
It “raises significant antitrust concerns,” said Andre Barlow, an antitrust attorney with Doyle, Barlow & Mazard. He said that the Trump administration has removed barriers that might restrict the expansion of AI in order to adopt a pro-business stance on regulations.
DOJ: Trump’s AI plan backs competition and U.S. dominance.
Additionally, a Department of Justice official stated last week that promoting innovation by safeguarding AI competition through antitrust enforcement is also a component of President Donald Trump’s AI strategy, even though his top goal is to unleash U.S. dominance in AI by removing regulations and establishing growth incentives. “The question is whether the agencies see this investment as pro-growth or something that could slow AI growth,” Barlow said.
For the GPU processors that power the data centers that power AI models and apps like OpenAI’s ChatGPT, Nvidia commands over half of the market. According to Rebecca Haw Allensworth, an antitrust expert at Vanderbilt Law School, Nvidia’s dominating market position raises worries that it would choose OpenAI over other clients with lower prices or quicker delivery periods.
Nvidia’s OpenAI stake may affect fair access, but the company denies bias.
“They have a financial stake in each other’s prosperity. As a result, Nvidia is motivated to avoid selling processors to or on the same conditions as other OpenAI rivals, Allensworth said. According to an Nvidia representative, the company’s investment in OpenAI would not cause it to shift its priorities.
“We will continue to make every customer a top priority, with or without any equity stake,” a spokeswoman said.
A request for comment from OpenAI was not immediately answered.
According to Nvidia’s financial records, which do not identify the buyers, the company’s largest client base is already very concentrated, with the two biggest purchasers contributing 23% and 16% of its sales in the second quarter of this year.
Nvidia’s $100B deal shows how costly advanced AI has become, favoring only big players
The extent of Monday’s agreement, which calls for Nvidia to spend up to $100 billion in OpenAI in exchange for the latter purchasing millions of Nvidia processors, demonstrates “just how expensive frontier AI has become,” according to Sarah Kreps, head of Cornell University’s Tech Policy Institute.
“The cost of chips, data centers and power has pushed the industry toward a handful of firms able to finance projects on that scale,” Kreps said.
The DOJ and U.S. Federal Trade Commission were vigilant about anticompetitive practices by Big Tech businesses in the AI domain during Joe Biden’s administration, cautioning that these corporations may utilize their current size to control the emerging industry.
The chief of the Department of Justice’s antitrust section, Gail Slater, emphasized on Thursday that regulatory enforcement must prioritize preventing exclusionary practices related to critical resources necessary for developing competitive AI systems and products. Such exclusionary conduct could unfairly block other companies from accessing essential technology or infrastructure, thereby harming innovation and market competition.
Both the DOJ and the Federal Trade Commission have actively pursued additional legal actions against major Big Tech corporations during the Trump administration, reflecting increased scrutiny of their market dominance. Slater further explained that understanding the competitive dynamics at every level of the AI technology stack—along with how these layers interact—is vital. In particular, the agencies are focused on behaviors that restrict access to key inputs and distribution channels, as these actions represent valid and important grounds for antitrust investigations