To The Moon

The U.S. stock market opened in the black in September, and chip stocks were hit even harder $ Triple Long Semiconductor ETF - Direxion Daily (SOXL)$, with $NVIDIA Corp(NVDA)$ plunging 9% intraday.But woe is not alone, after hours, according to Bloomberg's report, the U.S. Department of Justice (DOJ) recently issued a subpoena for an antitrust investigation of NVIDIA, also means that the broader review of the semiconductor industry continues to escalate.

The antitrust investigation against NVIDIA is focused on

1. Business practices: including its pricing strategy and market dominance, as well as competition in artificial intelligence and gaming;

2. Supply chain: concerns that NVIDIA is making it difficult for customers to switch to other suppliers and penalizing buyers who don't use its chips;

3. Acquisition deals: including those targeting RunAI.

Reasons why NVIDIA is a target

• Market dominance: NVIDIA has established a significant position in the graphics processing unit (GPU) market, and its products are critical to artificial intelligence applications and gaming.This dominant position raises concerns about whether its behavior may restrict competition or lead to unfair pricing.

• Regulatory Environment: The current regulatory landscape in the U.S. is increasingly focused on antitrust issues, particularly in the technology sector.

• High-Profile Acquisitions: NVIDIA's aggressive acquisition strategy, including its attempt to acquire $ARM Holdings Ltd (ARM)$, has attracted the attention of regulators.Such moves may be seen as efforts to consolidate power and limit competition, prompting further investigation.

• Public and political pressure: There is increasing public and political scrutiny of the influence of major technology companies, including NVIDIA.This pressure may lead to increased investigations by regulators to address concerns raised by stakeholders.

If it is determined that monopolistic behavior exists, the following types of measures may be taken

1. Fines

Fines may amount to as much as 10% of their global annual turnover.

2. Business restructuring

Nvidia may be required to reorganize its business or restructure its business model to eliminate conduct deemed to be anticompetitive in nature.This includes changing pricing strategies, modifying terms of sale or ceasing to impose penalties on customers who do not use its products

3. Monitoring and compliance requirements

may require more stringent monitoring of future business operations, including the submission of periodic compliance reports.

4. Prohibition of Acquisitions or Mergers

In addition, if DOJ deems the situation serious, it will also take measures such as litigation and policy changes.

Historically, the most well-known companies that have been found by DOJ to have engaged in monopolistic behavior, and the most relevant to NVIDIA, are $Microsoft (MSFT)$, $Qualcomm (QCOM)$.

1. Microsoft

   In the late 1990s, DOJ accused Microsoft of limiting competitors' market opportunities by bundling its Windows operating system with the Internet Explorer browser. Measures: Settlement Agreement: In 2001, Microsoft reached a settlement with DOJ, promising to provide greater compatibility and openness in future products. Monitoring: Microsoft was required to submit to court oversight to ensure compliance with antitrust laws and to submit regular compliance reports.

2. Qualcomm.

   Qualcomm has been accused of abusing its dominant market position and adopting unfair patent licensing strategies to restrict competition. Measures: Fines: Qualcomm faces large fines in several countries, including the US and China. Business adjustments: Qualcomm was required to change its patent licensing practices to promote competition in the marketplace