On the evening of December 9th, the State Administration for Market Regulation issued a notice stating that Nvidia was suspected of violating the Anti Monopoly Law of the People's Republic of China (hereinafter referred to as the "Anti Monopoly Law") and the Announcement of the State Administration for Market Regulation on the Anti Monopoly Review Decision on the Approval of Nvidia's Acquisition of the Equity of Maxus Technology Co., Ltd. with Additional Restrictive Conditions (State Administration for Market Regulation Announcement [2020] No. 16). The State Administration for Market Regulation has launched a case investigation into Nvidia in accordance with the law.
On December 9th Eastern Time, Nvidia closed down 2.55% at $138.81, with its market value evaporating by $88.9 billion (approximately RMB 646 billion) overnight.
On December 10th, the relevant person in charge of NVIDIA responded to Southern Metropolis Daily reporters, saying, "We strive to provide the best products in every region and fulfill our commitments wherever we conduct business. We are happy to answer any questions from regulatory agencies regarding our business
The Chinese market accounted for 12.7% of Nvidia's revenue in the first three quarters
As a globally renowned chip company, while the global race for generative AI and big models is booming, some people claim that all computing power demands have been converted into Nvidia's financial report data. According to data from Wells Fargo in February this year, Nvidia's global data center graphics processing unit (GPU) market share in 2023 is 98%. The second ranked AMD has a market share of only 1.2%, while the third ranked Intel has less than 1%.
Nvidia's third quarter financial report for the fiscal year 2025 ending on October 27th showed revenue of $35.082 billion, a year-on-year increase of 94% and higher than market expectations of $33.28 billion; Net profit under US GAAP was $19.309 billion, up 109% year-on-year; Diluted earnings per share under Non GAAP were $0.81, up 103% year-on-year and higher than market expectations of $0.74. The company's gross profit margin was 74.6% in the fiscal quarter, up 0.6% year-on-year but down 0.5% month on month.
At that time, Nvidia CEO Huang Renxun said, "The AI era is fully powered, driving the global shift towards Nvidia computing. Due to the large-scale promotion of pre training, post training, and inference by basic model developers, the demand for Hopper chips and expectations for the now fully operational Blackwell chips are exceptionally strong. AI is changing every industry, every company, and every country. Enterprises are adopting proxy AI to completely revolutionize workflows, and investment in the field of industrial robots has surged due to breakthroughs in physical AI. Countries have also realized the importance of developing national AI and its infrastructure
In addition, Nvidia's financial report shows that as of the first three quarters of 2024, Nvidia's revenue in Chinese Mainland (including Hong Kong) was $11.57 billion, accounting for 12.7% of its revenue. It can be seen that the Chinese market has a significant proportion in Nvidia's revenue market.
Previously received anti-monopoly regulatory requirements from relevant agencies in the United States and Europe
According to the information released by the State Administration for Market Regulation, this investigation is targeted at Nvidia's acquisition of Maxus. According to the official website, Mailuosi is a company established in Israel in 1999 and listed on the NASDAQ stock exchange in the United States, mainly engaged in the research and development, production, and sales of network interconnection products. On March 10, 2019, the parties to the transaction signed an agreement that Nvidia intends to acquire all shares of Maxus. After the centralized completion, Maxus became a wholly-owned subsidiary of Nvidia.
In this case, the State Administration for Market Regulation believes that according to Article 27 of the Anti Monopoly Law, the State Administration for Market Regulation has conducted a thorough analysis of the impact of the concentration of operators on market competition, including their market share and control in the relevant market, market concentration in the relevant market, and the impact on downstream user enterprises and other relevant operators. It is believed that this concentration has or may have the effect of excluding or restricting competition in the global and Chinese GPU accelerator, dedicated network interconnection equipment, and high-speed Ethernet adapter markets.
The State Administration for Market Regulation requires Nvidia to continue supplying Nvidia GPU accelerators, Maxus high-speed network interconnection devices, and related software and accessories to the Chinese market within six years after the completion of the acquisition transaction, based on the principles of fairness, reasonableness, and non discrimination.
In addition, since 2024, Nvidia has also faced antitrust regulatory challenges in the United States and Europe. In June of this year, according to media reports, two antitrust regulatory agencies in the United States, the Department of Justice (DOJ) and the Federal Trade Commission (FTC), have reached an agreement on the scope of antitrust regulation in the field of AI. Insiders have revealed that the Department of Justice (DOJ), the US antitrust regulator, will investigate Nvidia's dominant position in the AI chip industry, targeting several of the hottest companies in the US AI field. In addition, in November 2023, Nvidia also disclosed that it had received requests for information related to its GPU from regulatory agencies in the European Union, China, and France.