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

Nvidia shares recorded the largest one-day fall in history amid a US Department of Justice 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 antimonopoly 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 by 9.53% during Tuesday's trading session, even before the information about the investigation was published, its capitalization decreased by $279 billion. After the investigation data was released, Nvidia's price fell by another 2.41% after hours.

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

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

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

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

In June, Nvidia became the world's most valuable company with a market capitalization of around $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 artificial intelligence training cluster 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 over 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 on the merits reflected in our benchmark results and the value we provide to customers who can choose the solution that best suits them," the company said in a statement emailed to Bloomberg.

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

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