US DOJ probes Nvidia’s licensing deal with AI startup Groq, NYT reports

Nvidia designated Australia as a 2GW sovereign AI hub, grouping eight operators under a 2027 deadline. The initiative aims to prioritize AI infrastructure, but grid constraints may delay power supply. Nvidia's DSX AI factory platform optimizes power efficiency, with partners like Sharon AI and CDC committing significant GPU deployments.

The U.S. DOJ has opened an antitrust probe into Nvidia's $17B licensing deal with AI chip startup Groq, questioning whether it should have been reported as an acquisition. The deal, structured as a license and talent transfer, avoids HSR filing requirements. Nvidia denies wrongdoing, while the DOJ considers financial penalties. The probe could set a precedent for similar deals in the AI industry.

Rackspace Technology (RXT) shares rose 13% after announcing a partnership with NVIDIA. RXT will offer NVIDIA Blackwell-powered AI infrastructure for regulated enterprises and governments, joining NVIDIA's Cloud Partner Program. The collaboration aims to provide secure, compliant AI solutions for organizations.

Piper Sandler initiated coverage of five AI chip stocks, rating them Overweight. Nvidia (NVDA) was given a $300 price target, with an 80% market share in AI compute. Broadcom (AVGO) was started at $460, with a 75% share in custom ASIC chips. AMD (AMD) was initiated at $600, with a 65% earnings growth forecast. Marvell (MRVL) and Arm Holdings (ARM) were also covered, with price targets of $270 and $320, respectively.

The US Justice Department is investigating Nvidia's acquisition of AI chip startup Groq, citing antitrust concerns, as reported by The New York Times and Reuters.

Nvidia (NVDA) expects 70% revenue growth next fiscal year, according to CFO Collette Kress. Analysts project $9.31 EPS for this year, suggesting $15.83 EPS if growth matches revenue. The stock trades at 29 times earnings, implying a potential $460 price if targets are met. NVDA is down 0.91% to $223.42.