Nvidia experienced its largest single-day loss in market capitalization on September 3, shedding nearly $280 billion in value after the United States Department of Justice (DOJ) reportedly issued the chipmaking giant an antitrust subpoena. This is the biggest one-day value decline for any stock in U.S. market history.

Nvidia Suffers Historic $278 Billion Market Cap Loss Following U.S. Antitrust Subpoena

Stock Price Drop

Nvidia's stock plummeted by 9.5%, closing the day at $108, with after-hours trading pushing the share price even lower to $105. This drop erased $278 billion from its market cap.

DOJ Antitrust Investigation

The DOJ's subpoena marks an escalation in its ongoing investigation into Nvidia's business practices. The government is reportedly investigating whether Nvidia has penalized customers that do not exclusively use its computer chips and AI services, raising concerns about potential antitrust violations.

Previously, the DOJ had issued non-binding questionnaires to Nvidia seeking more information. The subpoena now legally compels Nvidia and other companies involved to provide documentation, which suggests the government may be preparing to file a formal complaint against the company.

Nvidia's Response

Nvidia responded to the allegations, denying any wrongdoing. The company stated that its products win on merit, as evidenced by performance benchmarks and customer value. CEO Jensen Huang emphasized that the company prioritizes customers using Nvidia products in ready-to-go data centers to prevent stockpiling and expedite installations.

Market Context and Rivalry

Nvidia, founded in 1993, has rapidly become the world's largest manufacturer of computer chips, particularly those used in artificial intelligence (AI). Its dominance in AI infrastructure has led Nvidia to far outperform its competitors, such as Intel and Advanced Micro Devices (AMD). At the time of writing, Nvidia's market cap of $2.65 trillion is 30 times larger than Intel and 12 times larger than AMD.

The antitrust investigation raises concerns about Nvidia's business practices, potentially affecting its dominance in the AI chipmaking market.