Nvidia (NVDA) shares fell more than 2% on Thursday, extending a two-day losing streak as a combination of macroeconomic headwinds and fresh regulatory scrutiny weighed on the AI trade. The broader market also declined, with the Dow Jones Industrial Average losing 258 points (0.5%), the S&P 500 dropping 0.5%, and the Nasdaq Composite slipping 0.4%.
Oil surge and Treasury yields pressure tech
US West Texas Intermediate crude futures for October delivery climbed above $100 a barrel, while Brent crude for November jumped above $105, as the conflict between the US and Iran entered its seventh month. The spike in oil prices pushed the 10-year Treasury yield above 4.9%, its highest level since November 2023, adding pressure to high-beta technology and semiconductor stocks. Intel fell about 6%, and Micron Technology dropped roughly 4%.
DOJ examines Nvidia-Groq arrangement
Nvidia's decline also comes as the US Justice Department is examining whether the company structured its acquisition-related agreement with AI chip startup Groq to avoid antitrust scrutiny, according to Bloomberg. The investigation centers on a deal announced in December under which Nvidia obtained rights to Groq's technology. Groq CEO Jonathan Ross and COO Sunny Madra subsequently joined Nvidia, while Groq remained an independent company. US lawmakers later characterized the arrangement as a takeover that limited competition.
The DOJ is looking into licensing-and-hiring arrangements more broadly as regulators scrutinize how a small number of companies are consolidating influence over the AI industry. Companies including Amazon, Microsoft, and Alphabet's Google have also faced scrutiny over similar arrangements that provide access to technology and engineering talent without necessarily triggering conventional merger review, according to the report. Regulatory questioning of the Nvidia-Groq arrangement began earlier this year, and the probe, previously reported by The New York Times, could ultimately end without enforcement action. Groq did not submit its licensing agreement with Nvidia for antitrust review.
Nvidia expands AI strategy
The regulatory scrutiny comes as Nvidia continues expanding beyond its core semiconductor business. On Wednesday, Nvidia and Palantir Technologies announced a new AI collaboration focused on what they describe as "sovereign AI" for critical supply chains. The system will initially operate within Nvidia's own manufacturing and logistics network before being extended to other industries. The collaboration combines Nvidia's Nemotron open models with Palantir's Foundry and AIP platforms and uses Palantir's Ontology system to provide real-time visibility into supply-chain constraints.
The companies said the system will also help codify operational knowledge and accelerate decision-making. Companies using the system will retain control of their own data and will not need to route it through a shared commercial AI model. This partnership highlights the broader strategy Nvidia is pursuing as it seeks to capture value from the expansion of AI infrastructure and applications. For more on Nvidia's recent moves, see the Palantir collaboration and analyst views on the Hugging Face deal.
Investors are also watching Nvidia's upcoming events, including a September 10 event that could set the next move for the stock, as noted in this analysis. Meanwhile, some analysts see significant upside potential, as highlighted in this report.
This article is for informational purposes only and does not constitute financial advice.
