On August 2nd Beijing time, according to informed sources cited by US media, the US Department of Justice is conducting an antitrust review on Nvidia's (NVDA, stock price $109.210, market value $2.7 trillion) acquisition of Israeli artificial intelligence startup Run: AI. The two companies announced the transaction in late April, but the specific acquisition amount has not been disclosed to the public. However, some media reports suggest that the transaction amount is $700 million.
On August 1st, the US stock market closed with Nvidia's stock price plummeting by 6.67%. Prior to the stock market on August 2nd, Nvidia's stock price continued to decline, with a drop of 3.90% as of press time.
Nvidia is deeply embroiled in antitrust investigations
The US Department of Justice is not the only agency conducting an antitrust investigation into Nvidia, and the Federal Trade Commission has also been involved in the investigation.
According to foreign media, the investigation is led by the US Department of Justice and jointly promoted with the US Federal Trade Commission. In June, both sides reached a consensus to clarify the division of labor - the Department of Justice will focus on the antitrust review of Nvidia's business practices, while the Federal Trade Commission will shift its investigation focus to the monopolistic behavior of Microsoft and its partner OpenAI in the field of big models.
On July 1st, according to foreign media reports, the French antitrust regulatory agency plans to accuse Nvidia of alleged anti competitive behavior.
In late July, the US Department of Justice, Federal Trade Commission, European Commission, and UK Competition and Markets Authority issued a joint statement expressing deep concerns about a few companies monopolizing competitive resources in the current market.
Official website of the Federal Trade Commission of the United States
The Federal Trade Commission stated in a joint statement, "All four antitrust enforcement agencies have pledged to remain vigilant about potential competition issues and are determined to use their existing powers to prevent strategies that may disrupt fair competition or lead to unfair or fraudulent behavior in the artificial intelligence ecosystem
NVIDIA's' Shopping Strategy '
Run: AI has previously established a partnership with Nvidia to provide support for graphics processing unit (GPU) virtualization. According to the NVIDIA blog, Omri Geller, co-founder and CEO of Run: ai, stated that "Run: ai has been working closely with NVIDIA since 2020. We are all passionate about helping our clients fully leverage their infrastructure
NVIDIA official website
The core technological advantage of Run: AI lies in its ability to enable customers to efficiently complete more tasks with limited chip resources. In the current market environment where chip supply is in short supply, this is undoubtedly a highly valuable service.
One of the doubts surrounding the Run: AI deal is that there are concerns that Nvidia may acquire the company with the intention of hiding a cutting-edge technology that can significantly improve customer computing efficiency and accomplish more tasks with fewer resources. If Run: AI is not acquired, this technology may have a negative impact on Nvidia's main source of profit.
'Bundled sales' or' forcing users to accept specific conditions'?
According to sources, the US Department of Justice's antitrust investigation into Nvidia is divided into two parts, one targeting Nvidia's transaction with Run: AI and the other primarily targeting Nvidia's business practices. The two surveys are independent but related, both investigating whether Nvidia is using its GPU technology advantages to build market barriers.
According to informed sources, as part of the comprehensive review of Nvidia, the investigation team of the Ministry of Justice is actively inquiring about the details of Nvidia's sales behavior, especially focusing on whether Nvidia has set additional conditions in the sales process, such as requiring customers to bundle their chips when purchasing other products, or promising not to purchase chips from competitors as a prerequisite for the transaction.
According to multiple insiders, Nvidia has been criticized by some customers and competitors. They claim that Nvidia's sales strategy limits users' choices and that Nvidia forces users to accept specific conditions during the sales process. In addition, they also expressed dissatisfaction with Nvidia's bundling of chips with other necessary software for sale.
Another issue is that developers will use NVIDIA CUDA software to write applications for their GPUs. The high dependence of the industry on Nvidia CUDA chip programming software has also raised concerns among antitrust authorities.