Evgenii "Gufis" Kondratev On December 10, Nvidia’s stock dropped by 2.5%. This occurred amid two troubling developments unfolding on both sides of the Pacific Ocean.
Let's start with the potentially more serious news. China’s State Market Regulatory Administration announced the initiation of an investigation into Nvidia, suspecting the company of violating antitrust laws. This was reported by Reuters.
The agency’s representatives did not disclose the specific reasons why Nvidia is under suspicion. Additionally, the corporation has been accused of breaching commitments made during its acquisition of the Israeli chipmaker Mellanox Technologies. Nvidia stated that they are more than willing to answer any questions raised by the regulator. Moreover, they emphasized that they do not consider themselves to be in violation of any obligations.
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At the same time, the New York Times published an article detailing how Jensen Huang, the company’s founder, uses popular strategies to avoid paying taxes — specifically, to ensure his heirs don’t have to pay 40% in inheritance taxes. Huang’s strategies are based on controversial court rulings and tax regulations that lawyers successfully interpret in favor of clients.
Currently, Huang faces no legal threats, but this could drive future changes in U.S. tax laws, which would certainly impact the entire business.
So, Nvidia is going through a rough patch, with good days alternating with bad ones, and right now, the company is experiencing a difficult period.
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