Nvidia Debunks DOJ subpoena claims following NVDA stock price crash

The AI-crypto ecosystem related to artificial intelligence took a huge hit this week, following the stock market collapse of Nvidia.

The company is now facing a subpoena from the Department of Justice (DOJ), causing shockwaves on the market.

This subpoena couldn't come at a worst time when investors are recalibrating their expectations around technology amid worries about slow payoffs from hefty investment.

The company's share fell by 2.5% in extended trading on Tuesday after losing 9.5% in the regular session, slashing Nvidia's market capitalisation by $279 billion, a record one-day loss for any company.

This brutal correction was triggered by an anti-trust investigation into the company following complaints that the company might be abusing its market dominance.

The investigation will focus on potential anti-competitive practices, including pressures exerted on Cloud Computing providers to purchase multiple Nvidia products.

The giant is also accused of overcharging its network hardware to customers wishing to use competing chips.

But this wasn't just a loss for Nvidia, but also many AI-related tokens who were also affected by the performance of Nvidia.

Bittersor (TAO), the main crypto project focused on AI, saw its price plunge by 12%. Other major players like Fetch.ai (FET), Render (RNDR), Near Protocol (NEAR) also saw their prices fell by 9%, 7%, respectively.

This close relationship between Nvidia and AI cryptos is a result of the company's ultra-dominant position in the market for chips dedicated to artificial intelligence.

With nearly 90% market share, Nvidia has become an essential barometer for the entire AI ecosystem, including in the crypto sphere.

The extreme volatility of the market

This fall from grace was a sharp contrast with the recent surge in the sector. Just a few weeks ago, the market capitalisation of AI tokens was seen skyrocketing by a whopping 13.7%, driven by optimism surrounding Nvidia's expected quarterly results.

Hence, this investigation could have a devastating impact on the AI sector is Nvidia is forced to revise its business strategies.

This investigation then would be something very concerning for investors who are putting their money in the AI blockchain ecosystem, given how the regulatory hurdles could impact market sentiment and investor confidence.

Nvida denies that it has received subpoena law.

But Nvidia has denied all allegations it was served with a subpoena by the DOJ.

Following denial, Nvidia (NVDA) saw a 0.46% rise to $106.70 at the close of after-hours trading - in which it briefly spiked to over $111, according to Google Finance.

Nvidia is also facing another possible class lawsuit in the US Supreme court, looking into the claim that Nvidia might be hiding over $1 billion in GPU sales made to crypto miners , whose CEO Jensen Huang downplayed the amount it sold to the sector.