China Launches Antitrust Probe Into Nvidia Amid Intensifying Tech Rivalry With US

China’s State Administration of Market Regulation (SAMR) has initiated an antitrust investigation into Nvidia, one of the world’s leading semiconductor companies, as tensions between Beijing and Washington escalate over advanced technologies such as artificial intelligence. According to The Financial Times, Chinese state media broke the news on Monday night, marking a notable moment in the growing competition over cutting-edge chip technology.

The investigation is reportedly examining whether Nvidia has violated China’s anti-monopoly laws, with particular attention on commitments the company made during its $6.9 billion acquisition of Mellanox in 2020. Mellanox, an Israeli-American networking products provider, was a key asset in Nvidia’s expansion into high-performance computing and data centers. The deal had been conditionally approved by Chinese regulators, per The Financial Times.

Nvidia’s Dominance in AI and US Export Controls

Over the years, Nvidia has emerged as a dominant player in the global AI chip market. Its GPUs (graphics processing units) have become indispensable in the development of advanced AI models. However, the company’s business in China has faced increasing restrictions. US export controls have limited Nvidia to selling less capable versions of its flagship GPUs to Chinese customers, driving a black market for smuggling more advanced processors into the country.

Related: EU Probes Nvidia Over Alleged Bundling Practices Amid Run:ai Acquisition Scrutiny

“This probe appears to be a political action rather than a legal one,” an unnamed Chinese antitrust expert told The Financial Times, suggesting the investigation might be tied to geopolitical tensions rather than purely regulatory concerns. The expert noted the unusual step of Chinese state media taking the lead in publicizing the investigation.

Broader Context of US-China Tech Rivalry

The timing of the probe follows a week of significant developments in the tech standoff between the two nations. The United States recently announced tighter export controls on high-bandwidth memory chips and chipmaking tools destined for China. In response, Beijing imposed its own restrictions on critical materials bound for the US, further exacerbating trade friction.

These export restrictions are expected to challenge domestic Chinese tech firms, such as Huawei, which require advanced memory chips for their AI processors. Meanwhile, four Chinese government-backed industry associations have encouraged local companies to reconsider their reliance on US silicon, calling it “no longer safe or reliable” in coordinated statements last week, according to The Financial Times.

Implications for Nvidia

The investigation places Nvidia at the center of China’s ongoing efforts to reshape its semiconductor industry and reduce dependence on foreign technology. As one of the most influential players in the global AI landscape, Nvidia’s operations in China could face increased scrutiny and regulatory hurdles amid the broader geopolitical rivalry.

Source: The Financial Times