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Nvidia's antitrust pressure is escalating. According to Bloomberg, the AI heavyweight has received several subpoenas from the Department of Justice as part of an ongoing investigation into Nvidia's dominance in the AI space. With us to discuss, I've got Bill Baer, who is the former Assistant Attorney General of the DOJ's Antitrust Division and current visiting fellow at the Brookings Institution. Great to have you here with us today. So, from what you've read through here on Nvidia and this subpoena that's come forward, does it have weight? Does it carry weight into what the allegations are and how Nvidia has essentially kind of entrenched itself or given itself a moat in an ever-changing AI landscape that really derives from some of the chips at the the bottom end where Nvidia deals and dabbles?

Well, thanks for having me back. It's, it's good to be with two of you again. We don't know a lot about what the Justice Department is doing here. We understand there've been subpoenas that have come out. We understand there's some concern that Nvidia may be trying to force purchasers of its processors, AI processors, chips to, um, uh, to be exclusive, um, uh, let Nvidia be its exclusive supplier and charging higher prices for those customers who are sourcing chips from multiple companies. That could be an antitrust problem, but it's really important to know the subpoena is an early stage event in an antitrust inquiry. There's going to be a lot of time for the government and Nvidia to negotiate what's going to be complied, both in terms of documents and data, a lot of time for the Justice Department to analyze it. And then if they want to keep going, they're going to subpoena, uh, deposition testimony from company officials, from competitors, from customers, who may feel aggrieved. So, we've got a long way to go. This is not a matter of weeks, uh, it's months.

Well, and it's interesting because we spoke with Patrick Moorhead earlier about the potential timeline. He's an analyst who looks at some of the chip stocks. Let's take a listen to what he had to say about the path forward here.

I think investors know, particularly institutional investors, that any type of Department of Justice, uh, ruling, I mean, my gosh, this takes, uh, this takes a decade. Uh, what Nvidia can be doing, uh, is to continue to have the highest performance, uh, computing, uh, in, in the data center, uh, to solve the problems of the hyperscalers and the enterprises and the tier two, uh, CSPs.

In your experience, Bill, does a probe like this, which according to Patrick could take up to a decade, prevent companies from exploring any future growth opportunities, and could that potentially weigh on a company like Nvidia moving forward, or will this sort of be business as usual, uh, with the DOJ and Nvidia?

I mean, most companies would continue to pursue, uh, the practices they think that are profit maximizing. I do think it's a bit of hyperbole to suggest it's going to take a decade. At the same time, uh, one of the things the Federal Trade Commission and the Antitrust Division are trying to do is get ahead of the curve, figure out where a market may be trending toward a monopoly, and intervene earlier. They're certainly trying to do that in the AI space.

And so for the Department of Justice and, and other regulatory bodies that are trying to both at the same time wrap their heads around a new technology wave that they're seeing, and then understand how to apply any type of the legal constructs that already exist here, you know, how much of a learning curve do you think there's still going to be around such an innovative part of the, the broader tech sector right now?

Well, I think the government's gotten pretty sophisticated about antitrust analysis of the tech sector. Look at the Google case, uh, Google search engine case which DOJ recently won, we're about to have a trial on, uh, Google AdTech. So, um, uh, the government has gotten more knowledgeable, more sophisticated, and I moving more quickly than, uh, maybe 15 or 20 years ago.