China has initiated an investigation into Nvidia over alleged violations of the country’s anti-monopoly laws, signaling a potential escalation in the ongoing tech and trade tensions between Beijing and Washington, reported Global Times.
The probe, announced by China’s State Administration for Market Regulation (SAMR), aims to assess whether the US chipmaker breached conditions tied to its 2019 acquisition of Israeli chip designer Mellanox Technologies.
The SAMR statement did not specify how Nvidia may have violated anti-monopoly laws but suggested the company might have failed to adhere to commitments made during the Mellanox deal, the report added. These commitments included conditions on product bundling, trading terms, and discriminatory practices.
A retaliatory move?
The investigation into Nvidia comes amid escalating US-China tensions in the semiconductor sector, with both sides leveraging economic and regulatory tools to secure strategic advantages. Nvidia, which holds a dominant share in China’s AI chip market, has been navigating challenges posed by US export controls and increasing competition from domestic rivals like Huawei.
“Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them,” Nvidia said in a statement. “We work hard to provide the best products we can in every region and honor our commitments everywhere we do business.”
As the situation unfolds, the probe underscores the delicate balance global technology companies must maintain while operating in politically charged markets.
“We are happy to answer any questions regulators may have about our business,” the company further added.
The investigation comes shortly after the US imposed fresh export restrictions on China’s semiconductor industry, targeting 140 companies and cutting off access to advanced chip technologies. In response, Beijing recently banned exports of critical minerals like gallium and germanium to the US, which are essential components in semiconductor manufacturing.
Chinese industry groups have also called on domestic firms to prioritize local chip suppliers, labeling US chips as “no longer safe” amid the increasing geopolitical friction.
Nvidia’s role in US-China chip battle
Nvidia, a dominant player in AI and gaming chips, has been significantly affected by the US-China chip war. Previous US export restrictions barred the company from selling its most advanced AI chips to China, leading Nvidia to create modified versions that were compliant with US controls.
Despite this, Nvidia maintained a commanding 90% share of China’s AI chip market before the curbs, although its revenues from the region have since declined from 26% to 17% in the past two years.
Competition from domestic players, including Huawei, has also increased, adding pressure on Nvidia in the Chinese market.
A broader pattern of retaliation
China’s anti-monopoly investigation into Nvidia mirrors its 2013 probe into Qualcomm, another major US tech firm. Qualcomm was fined $975 million for overcharging and market abuse, a move seen as Beijing flexing regulatory muscles amid trade tensions with Washington.
The Nvidia investigation underscores China’s growing pushback against US efforts to curb its technological advancements. As the US and China continue to lock horns over semiconductor supremacy, the probe highlights the precarious position of global tech companies navigating the increasingly fraught relationship between the two superpowers.
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