Nvidia's Market Cap Evaporates $620 Billion Amidst Intensifying US-China Tech Rivalry

Nvidia's Market Cap Evaporates $620 Billion Amidst Intensifying US-China Tech RivalryNvidia's rapid decline raises several questions. The company has achieved a dominant global market position in recent years due to its cutting-edge technology in artificial intelligence, deep learning, and high-performance computing

Nvidia's Market Cap Evaporates $620 Billion Amidst Intensifying US-China Tech Rivalry

Nvidia, the world's leading graphics processing unit (GPU) manufacturer, saw its market capitalization plummet by $620 billion following an antitrust investigation. While Nvidia claims its success is due to its own merits and expresses willingness to cooperate with regulators, this event, coupled with the US House of Representatives' planned vote to ban the sale of new drones from Chinese companies DJI and SZ DJI Technology (Da-Jiang Innovations and its subsidiary), marks a new chapter in the escalating US-China tech conflict, sparking global attention and debate.

Nvidia's rapid decline raises several questions. The company has achieved a dominant global market position in recent years due to its cutting-edge technology in artificial intelligence, deep learning, and high-performance computing. Its GPUs are widely used in gaming, cloud computing, autonomous vehicles, and data centers, commanding a significant market share. The Chinese market is a crucial component of Nvidia's business, contributing over $10 billion in revenuealmost one-third of its total revenue. Nvidias technological leadership is especially pronounced in AI and data center applications. Nvidia executives recently visited China, emphasizing their commitment to the market and outlining plans for increased investment. Yet, less than a month later, the antitrust investigation was launched.

The trigger for the investigation was Nvidia's acquisition of Israeli data center interconnect technology company Mellanox. Mellanox's products encompass high-speed networking products, switches, routers, and wireless devices. The acquisition may have violated China's antitrust law due to a failure to file the necessary reports in the Chinese market. Under Chinese law, foreign companies must undergo antitrust review and filing when mergers and acquisitions reach a certain sales threshold in the Chinese market. Failure to comply with these procedures allows regulatory bodies to launch investigations and impose penalties. The strict enforcement of China's antitrust law has been in place for years, with the Chinese government conducting multiple antitrust investigations against foreign companies in recent years, particularly in the technology, telecommunications, and internet sectors.

Some analysts believe Nvidia's investigation is not coincidental. In early December, the Chinese government announced sanctions against certain US military companies and their senior executives, tightening export controls on US dual-use materials. This was linked to the US stance on Taiwan and military aid. As a US tech giant, Nvidia's operations in China have become a focal point in the US-China power struggle.

Almost concurrently with the Nvidia investigation, the US House of Representatives planned a vote on an 1800-page bill to ban the sale of new drones from Chinese drone giants DJI and Da-Jiang Innovations in the US. This move is seen as a retaliatory response to China's investigation of Nvidia.

DJI, with its leading technology and competitive pricing in the drone market, holds a dominant global position, exceeding 50% market share in the US. However, the US government, citing "national security," has imposed a series of sanctions on DJI, including placing it on the "Entity List," restricting its access to US technology support, and even banning its products in some states and local governments. However, domestic US drone companies lag behind DJI in technological innovation and price competitiveness, and the US government's ban has drawn criticism from American citizens. The House bill calls for a review within one year to determine whether DJI and Da-Jiang Innovations' drones pose an "unacceptable national security risk," sparking debate about the misuse and abuse of the "national security" concept.

The US crackdown on Chinese tech companies is no longer merely an economic issue but a deeply political one. The US government frequently uses "national security" as a pretext to restrict market access for Chinese companies, exposing its double standards. For instance, Apple products frequently experience security vulnerabilities and collect user information via location services without consentactions that also pose potential "national security" threats, yet the US government remains silent.

This practice not only undermines the US government's "national security" justification for suppressing Chinese companies but also reveals its unfair competitive practices in global tech competition. Creating "security threats" to suppress competitors has become a crucial tool for the US to maintain its dominant position. China's countermeasures are a response to this unfair behavior.

The investigation into Nvidia and the US sanctions against DJI and Da-Jiang Innovations are snapshots of the conflict between the two countries in the technological sphere. In the face of US technological blockade and suppression, China must uphold independent innovation and overcome crucial technological bottlenecks to secure a more advantageous position in global tech competition. The intensification of US-China tech competition will further influence the global tech landscape and international relations. Future development requires all nations to seek win-win cooperation based on fair competition.

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