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Nvidia Responds to China’s Antitrust Probe, Vows Full Cooperation

By  |  December 10, 2024

Nvidia has expressed its willingness to cooperate with Chinese regulators after the country launched an investigation into the US tech giant’s recent acquisition activities. In a statement, a Nvidia spokesperson emphasized the company’s commitment to providing top-quality products across all regions and reaffirmed its readiness to answer any inquiries from regulators regarding its business practices.

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    The probe, announced by China’s State Administration for Market Regulation on Monday, centers on potential violations of the country’s anti-monopoly laws. While the regulator did not offer specific details about the nature of the alleged violations, it highlighted concerns related to Nvidia’s acquisition of Israeli chip designer Mellanox Technologies. This deal, which was approved by Chinese regulators in 2020, came with certain conditions, and the investigation now seems to focus on whether Nvidia has adhered to those commitments.

    This investigation represents another chapter in the ongoing tensions between the US and China over technological dominance. The two nations have been involved in a prolonged trade dispute, particularly in the semiconductor sector, with both sides implementing measures to assert their influence.

    The investigation comes on the heels of a rare warning issued last week by four of China’s top industry associations, urging local companies to reconsider buying US-made chips due to security concerns. The probe also coincides with a drop in Nvidia’s stock price, which fell by 2.5% following the news. The decline contributed to a broader downturn in the US stock market, particularly within the tech sector. The Nasdaq Composite, home to many major technology companies, lost 0.6% on Monday, while Chinese chipmakers like Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor saw losses of over 2% on the Hong Kong Stock Exchange.

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

    Despite the investigation, there appears to be some diplomatic effort to maintain a positive business environment. Last month, China’s Vice Commerce Minister, Wang Shouwen, reassured Nvidia’s executive Jay Puri that China was committed to creating a more favorable environment for foreign businesses, including Nvidia.

    According to Bob O’Donnell, chief analyst at TECHnalysis Research, the immediate impact of the investigation on Nvidia is likely to be minimal. O’Donnell noted that most of Nvidia’s advanced chips are already restricted from being sold to China due to US sanctions. The US has been tightening its grip on China’s semiconductor industry, with recent actions that include limiting exports to 140 Chinese companies.

    The investigation also follows a series of retaliatory measures between the two countries. Earlier this year, the US imposed further restrictions on China’s semiconductor sector, prompting China to impose its own trade barriers, including banning the export of critical minerals such as gallium, germanium, and antimony to the US.

    Despite these ongoing geopolitical frictions, O’Donnell pointed out that the Chinese government’s ability to directly affect the US semiconductor industry is diminishing over time. With most of Nvidia’s cutting-edge technology already restricted from China, the company’s response to these regulatory challenges may continue to focus on adapting to the evolving landscape.

    Source: The Standard