China has launched an antitrust investigation into Nvidia, one of the biggest chipmakers in US and the world. This comes amid escalating tech tensions between Beijing and Washington. The State Administration for Market Regulation announced the probe, providing limited details on the alleged violations, according to a Reuters report. This move is perceived as a response to the recent US export restrictions on China’s semiconductor industry.
The focus of the investigation is Nvidia’s 2020 acquisition of Israeli chip company Mellanox Technologies. China had approved the deal with conditions to prevent anti-competitive practices. Nvidia expressed its commitment to cooperate with regulators and continue providing top-tier products globally. Following the announcement, Nvidia’s stock fell by 2.5 per cent.
The probe occurs against a backdrop of growing US-China tensions in the semiconductor sector. The US recently restricted exports to 140 Chinese entities, aiming to limit China’s technological progress. In retaliation, China banned exports of key minerals essential for chipmaking to the US and urged domestic firms to reduce reliance on US technology.
Nvidia, which once dominated China’s AI chip market, has been significantly impacted by US export controls. The company can no longer sell its most advanced AI chips to China and has developed less capable versions to meet US restrictions. Despite this, China remains a crucial market, contributing 17 per cent of Nvidia’s revenue, down from 26 per cent two years ago.
This is not China’s first antitrust probe into a major US tech firm. In 2013, it investigated Qualcomm for market position abuse, resulting in a $975 million fine. Analysts view the current investigation as largely symbolic, given existing restrictions on Nvidia’s chip sales to China.
