Why Nvidia is Facing Lawsuits from Regulators Across the World 
2024.12.10.
With AI and chip technology becoming an integral part of most countries, experts indicate that we might expect more such regulatory scrutiny in the future
隨著人工智能與晶片科技成為許多國家整體部分，專家指出預期將來會有更多法規監督。
US chipmaker Nvidia, which is famous for its renowned artificial intelligence (AI) chips, is now facing investigation from China. The investigation relates to an alleged violation of the antimonopoly laws of the country. 美國晶片製造商Nvidia以其人工智能晶片而聞名，現正面臨中國之調查。該調查宣稱是有關於違反中國反獨占法。
At the time of the acquisition of the company, Jensen Huang, founder and CEO of Nvidia, said in a statement that the combined expertise of the two companies will help meet the “challenge of surging global demand for consumer internet services and the application of AI and accelerated data science from cloud to edge to robotics.”
在公司收購之際，Nvidia創辦人兼執行長Jensen 黃在聲明中說道：全球消費者對網路服務與人工智能應用挑戰竄升，加速資料科學從雲端到邊緣到機器人AI。
When the deal was being signed in 2020, it did face opposition from many. Some highlighted that with this agreement, the Israel-based company might end up making new technology that works only with Nvidia chips. Following this, Nvidia promised that they would ensure that their technology via the components of Mellanox would work effectively with the products of other companies as well.
當2020年簽約交易時，的確從多方面遇到險阻；該反對在所訂立契約中被凸顯出來，位在以色列只與nVIDIA合作的公司停止新技術製造，此事件之後，Nvidia向其承諾，將確保他們的技術藉由Mellanox的組件與其公司產品一樣運作良好。
Read: Nvidia CEO Jensen Huang Avoids Nearly $8 Billion in Taxes Amid Growing Market Dominance
As per Bloomberg, speaking about the deal in 2020, Huang highlighted that China was convinced to go ahead with the deal in return for openness. 

Now, coming to the current situation, it comes at a time when the Chinese government recently imposed sanctions on 13 defense firms of the USA. As per the New York Times, the sanctions were imposed by the country after the USA recently approved a $387 million defense package to Taiwan. Since China views Taiwan as a part of the territory, it considers this deal by the USA as a threat to its sovereignty. 
來到當下之情況，當中國政府最近對13家美國武器公司施予制裁，起因乃美國核准3億8千7百萬美元對台灣軍售使然。自從中國視臺灣為其領土一部分，其認為美國的這種軍售是對主權的威脅。

The move by China was in retaliation to the USA after the Biden administration recently imposed restrictions on the export of semiconductor chips and chip equipment to China. Export restrictions were imposed on 24 chipmakers by the US Commerce Department’s Bureau of Industry and Security.
中國此番舉動係針對拜登政府最近限制半導體晶片與晶片設備出口到中國之報復；美國商業部產業安全局對24家晶片製造商下限制出口令。

Nvidia Caught in USA-China Tension

One thing that is clear is that Nvidia is caught up in the USA and China tension. For example, in 2022, the USA government put a ban on Nvidia selling its most advanced AI processors to Chinese customers. Following this, the company said in an exchange filing that the sanctions were imposed by the government due to concerns that these products could be used for military purposes in China or Russia.
有一件事很明確，那就是Nvidia非常會抓準機會；舉例：2022年美國政府下禁令，禁止Nvidia出售最先進的晶片處理器給中國客戶Nvidia is Facing Lawsuits from Regulators Across the World 

2024.12.10.

With AI and chip technology becoming an integral part of most countries, experts indicate that we might expect more such regulatory scrutiny in the future

隨著人工智能與晶片科技成為許多國家整體部分，專家指出預期將來會有更多法規監督。

US chipmaker Nvidia, which is famous for its renowned artificial intelligence (AI) chips, is now facing investigation from China. The investigation relates to an alleged violation of the antimonopoly laws of the country. 美國晶片製造商Nvidia以其人工智能晶片而聞名，現正面臨中國之調查。該調查宣稱是有關於違反中國反獨占法。

At the time of the acquisition of the company, Jensen Huang, founder and CEO of Nvidia, said in a statement that the combined expertise of the two companies will help meet the “challenge of surging global demand for consumer internet services and the application of AI and accelerated data science from cloud to edge to robotics.”

在公司收購之際，Nvidia創辦人兼執行長Jensen 黃在聲明中說道：全球消費者對網路服務與人工智能應用挑戰竄升，加速資料科學從雲端到邊緣到機器人AI。

When the deal was being signed in 2020, it did face opposition from many. Some highlighted that with this agreement, the Israel-based company might end up making new technology that works only with Nvidia chips. Following this, Nvidia promised that they would ensure that their technology via the components of Mellanox would work effectively with the products of other companies as well.

當2020年簽約交易時，的確從多方面遇到險阻；該反對在所訂立契約中被凸顯出來，位在以色列只與nVIDIA合作的公司停止新技術製造，此事件之後，Nvidia向其承諾，將確保他們的技術藉由Mellanox的組件與其公司產品一樣運作良好。

Read: Nvidia CEO Jensen Huang Avoids Nearly $8 Billion in Taxes Amid Growing Market Dominance

As per Bloomberg, speaking about the deal in 2020, Huang highlighted that China was convinced to go ahead with the deal in return for openness. 

Now, coming to the current situation, it comes at a time when the Chinese government recently imposed sanctions on 13 defense firms of the USA. As per the New York Times, the sanctions were imposed by the country after the USA recently approved a $387 million defense package to Taiwan. Since China views Taiwan as a part of the territory, it considers this deal by the USA as a threat to its sovereignty. 

來到當下之情況，當中國政府最近對13家美國武器公司施予制裁，起因乃美國核准3億8千7百萬美元對台灣軍售使然。自從中國視臺灣為其領土一部分，其認為美國的這種軍售是對主權的威脅。

The move by China was in retaliation to the USA after the Biden administration recently imposed restrictions on the export of semiconductor chips and chip equipment to China. Export restrictions were imposed on 24 chipmakers by the US Commerce Department’s Bureau of Industry and Security.

中國此番舉動係針對拜登政府最近限制半導體晶片與晶片設備出口到中國之報復；美國商業部產業安全局對24家晶片製造商下限制出口令。

Nvidia Caught in USA-China Tension

One thing that is clear is that Nvidia is caught up in the USA and China tension. For example, in 2022, the USA government put a ban on Nvidia selling its most advanced AI processors to Chinese customers. Following this, the company said in an exchange filing that the sanctions were imposed by the government due to concerns that these products could be used for military purposes in China or Russia.

有一件事很明確，那就是Nvidia非常會抓準機會；舉例：2022年美國政府下禁令，禁止Nvidia出售最先進的晶片處理器給中國客戶；因美國政府憂心這些晶片處理器會被中國或俄羅斯作為軍事用途。

Read: Nvidia-Rival AMD to Layoff 1000 Employees, Slashes Global Workforce by 4%

Meanwhile, China is also trying to promote homemade chips in the country. A Bloomberg report published in September 2024 highlighted that Beijing is trying to push its homegrown chip companies to stay away from the USA-based chipmaker. 
同時，中國試著推廣自製的晶片；北京政府力促本土晶片公司勿依靠美國所屬的晶片製造商。

However, the move is not confined to only Chinese regulators but also others. In an exchange filing, Nvidia highlighted last month that several regulators, including those from the US, France, the UK, the European Union, South Korea, and China, contacted the chipmaker. 

Just to give a few examples, in July Reuters indicated that the chipmaker would face antitrust charges in France. The company was reportedly accused of anti-competitive practices. In a report published by the French authorities, it was highlighted that a huge reliance on the CUDA software of Nvidia might lead to the company having too much power. Just to give some context, Nvidia's CUDA software enables software to utilize GPUs and is fully compatible with all Nvidia GPUs. 

Similarly, in the USA, the chipmaker is facing an antitrust probe with regard to allegations of market dominance. The investigation was reportedly started by the USA Department of Justice. The investigation was also looking into the fact if the chipmaker was charging more from customers to discourage them from buying chips from its rivals. 

Meanwhile, the EU antitrust regulators have also started their probe on the company. The probe relates to finding if the chipmaker has been bundling its products. This in turn could give the USA-based company an unfair advantage in the market. 

Speaking about the same, Abhivardhan, Chairperson and Managing Trustee, Indian Society of Artificial Intelligence and Law, said that the regulatory focus on Nvidia misses the larger point about AI democratization and sovereignty. 

 “Instead of traditional antitrust frameworks, we need to examine how AI chip dominance affects national technological capabilities, especially for developing economies. The real concern isn't market dominance but the control over fundamental AI infrastructure that affects national strategic interests and research capabilities,” added Abhivardhan. 

Now, with AI and chip technology becoming an integral part for most countries, experts indicate that we might expect more such regulatory scrutiny in the future. So, how should Nvidia react? 

“Nvidia might respond by adjusting its pricing strategies, enhancing transparency in supply chain management, and possibly divesting or restructuring certain business units to comply with regulatory demands and mitigate antitrust concerns,” added Abhivardhan. 

Now, another area that the company has been struggling with is copyright issues. To give some context, in March, the AI chipmaker was sued by authors with regards to using copyright works. As per Reuters, authors Brian Keene, Abdi Nazemian, and Stewart O'Nan indicated that their work was used by Nvidia to train their language model called NeMo. This was later taken down due to copyright issues. 

With regards to the legal implications of it, Abhivardhan said, “On legal implications, it must be understood that while data scraping techniques have a correlative & interplayed effect, the fair use justifications raised by these companies can only work if their AI labeling practices do not disenfranchise and demonetize creators and end-users on various intermediaries & platforms, like those of social media.” Nvidia no doubt has a dominant position worldwide with around 80 percent market share. Further, on a year-to-date basis, the shares of the GPU maker have surged by nearly 190 percent on NASDAQ. With the dominance of AI increasing in every field, so will the scrutiny. It will be interesting to note how the company navigates through the ongoing challenges.

This move by the Chinese government relates to a violation of commitment with regard to the acquisition of Israel's computer networking equipment company, Mellanox Technologies. 

Post this incident, Nvidia reportedly said in a statement, “We work hard to provide the best products we can in every region and honor our commitments everywhere we do business.”