Nvidia shares collapsed against the backdrop of the US Justice Department's investigation

Nvidia shares saw the largest one-day fall in history amid a US Justice Department investigation into antitrust violations.

Authorities have sent subpoenas to Nvidia and other companies to investigate the chipmaker's activities, Bloomberg writes.

According to the agency, the Ministry of Justice previously sent out questionnaires to companies, and now it is sending legal requests requiring recipients to provide information. In this way, the government is taking the next step towards the start of an official investigation.

Bloomberg notes that antitrust authorities are concerned about Nvidia's actions to prevent partners from transitioning to other suppliers and punishing buyers who do not exclusively use the company's chips.

The company's shares fell 9.53% during Tuesday's trading session even before the investigation information was published, resulting in a decrease in its market capitalization by $279 billion. After the investigation data was released, the fall further amounted to 2.41% in after-hours trading.

Nvidia stock dynamics. Data: Yahoo Finance. Stocks of other chip manufacturers also fell:

• Intel — by 8%;
• Marvell — at 8.2%;
• Broadcom - by 6%;
• AMD - by 7.8%;
• Qualcomm - by 7%.

The VanEck Semiconductor ETF (SMH), which tracks the semiconductor industry, fell by 7.5%. This is the worst day since March 2020.

Shares of Asian semiconductor manufacturers such as SK Hynix, Taiwan Semiconductor Manufacturing, and Advantest also fell.

In June, Nvidia became the world's most valuable company for the first time with a market capitalization of about $3.34 trillion. Currently, the company is valued at $2.65 trillion. The company's microchips are in high demand amid the AI boom. For example, in early September, Elon Musk announced the creation of the Colossus cluster for training artificial intelligence using 100,000 H100 graphics processors.

According to various estimates, Nvidia holds over 80% of the AI chip market. The company's revenue has grown by more than 200% for three consecutive quarters. Lately, the growth rate has slowed down.

In response to questions about the investigation, Nvidia stated that its dominance in the chip market is due to the quality of its products, which provide higher performance.

"Nvidia wins thanks to its merits reflected in our benchmarks results, and the value for customers who can choose any solution most suitable for them", the company said in a statement sent to Bloomberg via email

As part of the investigation, the Ministry of Justice is examining the purchase of AI software manufacturer RunAI, which the chip manufacturer made in April. The regulator is also investigating whether Nvidia offers preferential prices to buyers who exclusively use its technology.

Recall that in early August, hedge fund Elliott Management stated that Nvidia is "in a bubble" and that the AI technology that determines the company's stock price is "overvalued".