China Launches Investigation into Nvidia Over Anti-Monopoly Concerns

China has launched an investigation into Nvidia, a US-based chipmaker, over suspected violations of the country’s anti-monopoly law. The move is seen as a retaliatory shot against Washington’s latest curbs on China’s semiconductor industry.

The State Administration for Market Regulation announced the probe, but did not elaborate on how Nvidia might have violated China’s anti-monopoly laws. The company is also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies.

Nvidia’s shares closed 2.5% lower on Monday. A spokesperson for the company said it worked hard to “provide the best products we can in every region and honor our commitments everywhere we do business. We are happy to answer any questions regulators may have about our business.”

The investigation comes after the US last week launched its third crackdown in three years on China’s semiconductor industry, which saw Washington curb exports to 140 companies, including chip equipment makers.

“It’s unlikely to have much of an impact on the company, particularly in the near term, because most of Nvidia’s most advanced chips are already restricted from being sold into China,” said Bob O’Donnell, chief analyst at TECHnalysis Research.

Signs of a Strong Response

China has taken several steps to show its intent to push back against the US restrictions. Shortly after Washington’s announcement, Beijing banned exports to the US of the critical minerals gallium, germanium, and antimony.

On the same day, four of China’s top industry associations issued a rare and coordinated response, urging Chinese companies to be wary of buying US chips, which were “no longer safe” and suggesting they buy locally instead.

Nvidia’s Struggle in China

Nvidia has been one of the many companies caught up in the US-China frictions. An earlier round of export curbs by the US stopped Nvidia from selling its most advanced AI chips to China, prompting it to come up with new China-specific versions that were compliant with US export controls.

China accounted for around 17% of Nvidia’s revenue in the year to the end of January, down from 26% two years earlier. The company faces increasing competition from domestic rivals, including Huawei.

Conclusion

China’s investigation into Nvidia is a significant development in the ongoing trade tensions between the US and China. The move is seen as a retaliatory shot against Washington’s latest curbs on China’s semiconductor industry. The investigation will likely have a limited impact on Nvidia’s operations in the near term, as most of its advanced chips are already restricted from being sold into China.

FAQs

* What is the reason for the investigation into Nvidia?
The investigation is over suspected violations of China’s anti-monopoly law.
* What are the consequences of the investigation?
The consequences are still unclear, but it may lead to fines or other penalties for Nvidia.
* What is the significance of this move?
It is a retaliatory shot against Washington’s latest curbs on China’s semiconductor industry, and a sign of China’s intent to push back against US restrictions.
* What is the impact on Nvidia’s operations?
The impact will likely be limited in the near term, as most of Nvidia’s advanced chips are already restricted from being sold into China.