Nvidia (NVDA), a dominant player in the AI chip market, is once again under regulatory scrutiny from EU antitrust regulators. According to an exclusive Reuters report, the European Commission antitrust regulator is probing whether Nvidia bundles its products in ways that might hamper competition. This inquiry could potentially lead to a formal investigation.
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Why Is the EU Probing NVDA?
The European Commission recently issued questionnaires to Nvidia’s rivals and customers to investigate whether the company bundles its graphics processing units (GPUs) with other products, such as networking equipment, in its contracts. This investigation is separate from another EU inquiry into Nvidia’s proposed acquisition of AI startup Run:ai.
The EU is examining whether Nvidia’s contracts with customers require them to purchase networking equipment alongside GPUs.
The demand for Nvidia’s chips has surged due to their use in generative AI and accelerated computing. While the Commission declined to comment, Nvidia stated, “We support open industry standards, enabling our partners and customers to use our products in a wide variety of configurations and system designs.”
If Nvidia is found to violate EU antitrust rules, it could face fines of up to 10% of its global annual revenue.
NVDA Is Facing Rising Regulatory Challenges
Nvidia has been under the scrutiny of regulators in the U.S., UK, China, and South Korea. Earlier this year, France’s antitrust authority reportedly began its own investigation and may bring charges against the chipmaker soon.
Is NVDA a Strong Buy?
Analysts remain bullish about NVDA stock, with a Strong Buy consensus rating based on 37 Buys and three Holds. Over the past year, NVDA has skyrocketed by more than 200%, and the average NVDA price target of $176.14 implies an upside potential of 21.7% from current levels.
