Google and Nvidia are facing another bearish attack.
According to Xinhua News Agency, the US Internet giant Google was ruled by a federal district court on the 5th to violate the US antitrust law.
Recently, tech giant Nvidia has also been embroiled in antitrust investigations. In early July, French regulatory authorities filed antitrust charges against Nvidia citing the risk of abuse of market dominance. Recently, it was reported that the US Department of Justice has also launched an antitrust investigation into Nvidia.
As of August 5th local time, in the first three trading days of August in the US stock market, Nvidia has fallen by 14.16% and its market value has evaporated by $407.6 billion; Google has fallen 7.22% cumulatively, with a market value evaporation of $151.3 billion.
US court rules that Google illegally monopolizes the online search market
According to Xinhua News Agency, the US Internet giant Google was ruled by a federal district court on the 5th to violate the US antitrust law. According to Reuters, if the court subsequently requests Google's parent company Alphabet to split its business or reshape the US online advertising market.
This information photo shows that on March 6, 2012, visitors visited the Google booth at the Hanover Information and Communication Technology Expo held at the Hanover Exhibition Center in Germany. Photo by Xinhua News Agency reporter Ma Ning
Google has been sued by the US Department of Justice for illegally maintaining its position as the primary default search engine by spending huge amounts of money. Judge Amit Mehta of the Federal District Court in Washington, D.C., made a ruling on the 5th: "The court has concluded that Google is a monopolist and has taken action to maintain its monopoly position
Meta supports the view of the US Department of Justice that the restrictive contracts signed between Google and mobile phone manufacturers such as Apple violate US antitrust laws. He pointed out that in 2021 alone, Google spent $26.3 billion to ensure that its search engine was set as default on smartphones and web browsers, and to maintain its market dominance.
Meta pointed out that Google has repeatedly raised search advertising prices, and there is "no evidence" to show that there is enough market competition to limit Google's price increases, while Google maintains high profits through advertising. According to Reuters, Google's advertising revenue accounted for 77% of Alphabet's total sales last year.
Meta also believes that there are various other behaviors in the "alphabet" that prevent competitors from competing fairly with it.
The verdict of the US court on the 5th paves the way for the continued trial of Google's alleged monopoly issues. According to an analysis by The Washington Post, there may be three possible solutions for the second phase of the trial: first, to prohibit Google from spending money to purchase default search engine settings; second, to require mobile phone manufacturers and web browsing service providers to directly inquire about consumers' preferences for search engines; and third, to split Google's existing various levels of business.
Kent Walker, president of Google Global Affairs, issued a statement on the judgment, saying that Google faced competition from other Internet giants in the field of search services. The court "recognized that Google provides the best search engine, but decided that we should not be allowed to make search engines more accessible". Google "intends to appeal".
According to Reuters, the second phase of the trial may be "lengthy", and Google may appeal to the Federal Supreme Court, ultimately possibly concluding the case in 2025 or even 2026.
The US government initiated anti-monopoly judicial proceedings against Google during former President Donald Trump's administration in 2020. The current President Joseph Biden administration officially sued Google in September last year. During the trial, executives from multiple companies including Microsoft and Apple appeared in court to testify against Google. Google is also facing an antitrust lawsuit in Virginia, USA, and similar antitrust investigations in regions such as the European Union.
According to foreign media reports, Microsoft reached an out of court settlement with the US Department of Justice in 2004 on the suspected illegal monopoly of its web browser. Since then, until 2020, the US government has not used the anti-monopoly law to prosecute Internet giants. During the Trump period, Internet giants such as Google, the Meta Universe Platform, Amazon and Apple were investigated by the US government for suspected illegal monopoly.
Huang Renxun has cashed out nearly 500 million US dollars in two months
Nvidia has been embroiled in rumors of delayed product shipments and anti-monopoly investigations in recent days. According to foreign media reports, Nvidia will delay the release of its latest AI chip by three months, which may affect customers such as Meta, Microsoft, and Google, who have ordered chips worth billions of dollars in total.
Insiders revealed that Nvidia's cutting-edge design utilizes TSMC's new manufacturing process, which has caused difficulties for certain models of the upcoming Blackwell series data center chips in preparing for mass production.
In March of this year, Nvidia officially launched a new generation of AI chip called Blackwell. The Blackwell platform is capable of building and running real-time generative AI on large-scale language models (LLMs) with trillions of parameters, at a cost and energy consumption 25 times lower than its predecessor.
Nvidia has stated that later this year, its partners will offer products based on Blackwell. Cloud service providers such as Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle Cloud Infrastructure will be the first to provide cloud services based on Blackwell products; Cisco, Dell, HP, Lenovo, and AMD are expected to provide servers based on Blackwell products.
In early July, French regulatory authorities filed antitrust charges against Nvidia citing the risk of abuse of market dominance. According to French antitrust laws, companies that violate antitrust laws may face fines of up to 10% of their global annual revenue. Based on Nvidia's revenue of $60.9 billion in fiscal year 2024, the maximum penalty amount can reach $6.09 billion.
There are also reports that the US Department of Justice has launched an antitrust investigation into Nvidia, mainly due to complaints from Nvidia's competitors that Nvidia may have abused its market dominance in selling artificial intelligence (AI) chips.
Recently, the US Securities and Exchange Commission (SEC) released documents showing that Nvidia founder Huang Renxun sold nearly $500 million worth of company stock between June and July. Huang Renxun first sold nearly $170 million worth of company stocks in June, and then sold $323 million worth of Nvidia stocks in July, setting a personal record for the highest monthly cash out. According to analysis, before the sharp drop in Nvidia's stock price in August, Huang Renxun's timing for cashing out was just right, hitting the "wind" of the last major rise in chip stocks.
In fact, at the end of March this year, Nvidia released a detailed quarterly financial report (Form 10-Q), which mentioned that Huang Renxun set up a 10b5-1 share sale plan on March 14 this year, which will sell up to 600000 Nvidia shares by the end of March 2025.
In recent weeks, Wall Street has been increasingly concerned about the sustainability of the artificial intelligence boom. In mid June, Nvidia became the world's most valuable company, with a market value of up to $3.34 trillion. As of press time, Nvidia's market value has fallen to $2.47 trillion.
UBS strategist Maxwell Grinakoff wrote, "As investors begin to lose patience with the monetization timetable, the tailwind of artificial intelligence has begun to weaken. We have previously pointed out that the concentration risk of this topic has increased, affecting electrification companies, copper miners, and data centers
The hedge fund Elliott Management recently told investors in a letter that Nvidia and other large technology stocks are in a "foam", and AI is "hyped excessively, and many applications are not ready for prime time".
(Source: Comprehensive report from this newspaper and Xinhua News Agency)