Nvidia slides in after-hours trading after price drop wipes out nearly $300 billion

Nvidia Shares fell 2% in extended trading Tuesday after Bloomberg reported that the company had received a subpoena from the Justice Department as part of an antitrust investigation.

The drop came after Nvidia fell nearly 10% during regular trading, wipe out $279 billion market capitalization reduction

The DOJ investigation has not yet reached the formal complaint stage, and the agency is questioning whether Nvidia made it harder to switch to other AI chip suppliers, according to Bloomberg. Nvidia has more than 80% of the market for data center AI chips, according to industry estimates.

Nvidia’s meteoric rise in recent years is directly related to its dominance in AI chips for data centers, established years before rivals AMD and Intel began taking the category seriously. Nearly a decade ago, Nvidia developed a programming language for its chips called CUDA, which is a key tool for engineers training advanced AI models like the one at the heart of ChatGPT.

Many of Nvidia’s biggest customers are cloud computing companies as well as internet giants, including Microsoft, Alphabet, Meta, Amazon and Tesla.

As Nvidia’s AI chips became a hot commodity, the company released new business software registration and markets its networking products as important add-ons to get the most out of its chips.

Recent versions of Nvidia chips may come pre-installed in Entire server rack designed by Nvidiaan example of Nvidia’s efforts to transition from a pure component supplier to a full system supplier.

An Nvidia representative told CNBC that the company “won on merit, as demonstrated by our benchmark results and the value we provide to our customers, who can choose whatever solution works best for them.” The Justice Department declined to comment to CNBC.