Source: Wall Street View, author: Zhao Yuhe.
In September last year, France had launched a raid inspection against Nvidia. If it is found to have engaged in monopolistic behavior, Nvidia may be fined 10% of its annual revenue. Nvidia's stock price fell 3.8% in early trading on Monday but later regained its losses.
According to insiders, the French antitrust regulator plans to accuse Nvidia of anti-competitive behavior, becoming the first country to take antitrust action against Nvidia.
Last September, French law enforcement agencies conducted a surprise inspection of the graphics card industry to obtain more information on potential abuse of market dominance. At the time, they did not confirm that the company was Nvidia, but Nvidia later admitted that France and other agencies were reviewing its business practices.
Insiders said the blitz inspection last year was the result of a wide-ranging investigation into cloud computing. As the world's largest manufacturer of artificial intelligence and computer graphics cards, Nvidia's chip demand soared after the release of ChatGPT, a generative artificial intelligence application program, attracting close attention from European and American antitrust authorities.
At present, both French regulators and Nvidia have refused to comment on this. In a regulatory document in February of this year, Nvidia said that regulators in the European Union and France had requested information about its graphics card products. "Our position in the AI-related market has attracted more attention from regulators around the world to our business," Nvidia said at the time.
It is reported that the French antitrust agency has been investigating market participants to understand Nvidia's key role in AI processors, pricing policies, chip shortages and their impact on prices. A report on generative artificial intelligence competition released by the French regulatory agency last Friday mentioned the risk of chip suppliers abusing their power.
The report expressed concern about the industry's dependence on Nvidia's CUDA chip programming software, as it is the only system that is fully compatible with the GPU required for accelerated computing. In addition, the report also mentioned unease about Nvidia's recent investment in CoreWeave, a cloud computing service provider focused on AI.
Companies that violate French antitrust rules face fines of up to 10% of their global annual revenue, but they can also offer concessions to avoid punishment. The agency's largest fine since 2011 was a 1.24 billion euro (1.33 billion U.S. dollars) fine in 2020. Of this, 1.1 billion euros were imposed on Apple, with the remaining amount being imposed on two distributors.
In Brussels, the European Commission has been informally collecting opinions to understand whether Nvidia has also violated its antitrust rules, but has not launched a formal investigation into anti-competitive behavior yet.
Last November, French Finance Minister Bruno Le Maire said Nvidia's dominant position was exacerbating inequality between countries and suppressing fair competition. He pointed out that 92% of GPUs come from Nvidia. "If you want fair competition, you need a lot of private companies, not the possibility of a single company controlling all equipment sales," Le Maire said.
Meanwhile, a source familiar with the matter revealed that the U.S. Department of Justice is leading an investigation into Nvidia, in conjunction with the Federal Trade Commission's review of large technology companies.
In response to France's antitrust action, Nvidia's stock price fell as much as 3.8% early on Monday, but later turned higher, and by midday it was down slightly by 0.32% to $123.15. Nvidia's stock price has more than doubled since the beginning of this year, making the company's market capitalization exceed $3 trillion.
Editor/Lambor