China’s State Administration for Market Regulation announced on Monday that it has launched an investigation into Nvidia over suspected violations of the country’s anti-monopoly laws. The probe is widely seen as a response to Washington’s recent actions aimed at curbing China’s access to advanced semiconductor technologies.
The investigation does not specify the details of how Nvidia, a leader in artificial intelligence and gaming chips, may have violated China’s anti-monopoly regulations. However, it also cites concerns over Nvidia’s commitments made during its 2020 acquisition of Israeli chip designer Mellanox Technologies. The company had agreed to supply products to China under specific, fair, and non-discriminatory terms as part of the deal’s approval.
The investigation is the latest chapter in the ongoing trade and technology rivalry between China and the U.S., with both nations vying for dominance in key industries. Last week, China’s top industry associations issued a rare warning to domestic companies, advising them to avoid purchasing U.S. chips, which they now view as “unsafe.”
Nvidia’s stock price dropped 2.5% following the announcement, but industry analysts suggest that the investigation may not significantly impact the company in the short term. “Most of Nvidia’s most advanced chips are already restricted from being sold to China,” said Bob O’Donnell, chief analyst at TECHnalysis Research.
The move comes after the U.S. imposed its third crackdown in three years on China’s semiconductor industry, tightening export controls on 140 companies, including key chip equipment makers. Beijing responded by banning the export of critical minerals like gallium, germanium, and antimony to the U.S.
Nvidia had previously dominated China’s AI chip market, holding over 90% market share before the U.S. restrictions. However, its revenue from China has declined, falling from 26% two years ago to around 17% today, as competition from domestic companies like Huawei increases.
The last time China targeted a major foreign tech company with an anti-monopoly investigation was in 2013, when Qualcomm was fined $975 million for overcharging and abusing its market position in wireless communication standards.
