Nvidia Slides as a New Palantir Pact Runs Into a Justice Department Probe

Nvidia stock fell in Thursday afternoon trading even as the company rolled out one of its highest-profile software partnerships of the year, a joint effort with Palantir to put artificial intelligence inside corporate supply chains. Shares were down 2.35% at $218.42 shortly after midday, off Wednesday’s close of $223.67, with the day’s low at $217.20. The two stories landed the same morning. Competing for attention was a report that the Justice Department is scrutinizing Nvidia’s licensing arrangement with the chip startup Groq.

A stack Nvidia is running on itself

The two companies said they had built a shared AI system for supply-chain management and that Nvidia is its first customer. The setup folds Nvidia’s open Nemotron models into Palantir’s Foundry and its AI Platform, using Palantir’s data layer, or ontology, to give planners a single place to make decisions such as how to allocate scarce materials. Nvidia said it is applying the tools to its own operation, the one that coordinates more than 1.3 million parts across every Vera Rubin server rack it builds. The reference design, which the companies call SAIOS, is set to run on hardware from Dell and Cisco for on-site use, with Rackspace and Nebius handling cloud and co-location options. Customers keep ownership of their own data.

A Justice Department demand hangs over the deal

The larger driver of the stock’s move sat outside that announcement. Bloomberg and The New York Times reported that the Justice Department has opened an antitrust review of the roughly $20 billion agreement Nvidia struck with Groq in December, a deal that gave Nvidia access to the startup’s technology while leaving Groq to operate on its own. Groq’s chief executive, Jonathan Ross, later joined Nvidia. So did its operating chief. Lawmakers have questioned whether the structure works as an acquisition that removes a competitor in AI chips, and the department has since sent Nvidia a formal demand for information. Nvidia has defended the agreement, saying it spreads Groq’s technology across its ecosystem while leaving the startup separately funded. People familiar with the inquiry said the government does not currently expect the deal to be undone, and the review could close without any action.

A soft tape and a hot inflation print

The decline came on a weak day for the broader market. Stocks slipped Thursday after a government report showed wholesale prices rose 0.4% in August, pushing the annual rate of the producer price index to 5.4%, a shade above what economists had expected and up from the prior month. Energy did most of the lifting. Final-demand energy prices jumped more than 4% in a single month, according to the Bureau of Labor Statistics. The reading arrived a week before the Federal Reserve’s next meeting, sharpening the debate over the path of interest rates. Chip stocks, which have led the market for much of the year, are sensitive to shifts in that outlook.

What to watch

Start with Thursday’s close. It will show how much of the intraday drop holds once the session ends. Beyond that, investors will track whether the Justice Department escalates its Groq review or lets it lapse, and how quickly the Palantir system moves from Nvidia’s own supply chain to outside customers. Next week brings the Fed decision, the event most likely to set the tone for large-cap technology in the near term. At about $218, Nvidia still carries a market value north of $5 trillion, so even a small percentage move shifts a large sum.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.