China Launches Antitrust Probe into Nvidia Amid Escalating US-China Chip War

China Probes Nvidia for Antitrust Violations Amid AI Trade Tensions

China has opened an investigation into chipmaker Nvidia for alleged antitrust violations, as per a Reuters report referring to a statement from China's State Administration for Market Regulation dated December 9. The authority did not specify why the probe was launched or how Nvidia violated China's anti-monopoly laws, according to the report. The statement said that the US chipmaker was also suspected of violating commitments it made when it acquired Israeli chip designing company Mellanox Technologies Ltd in 2020. Notably, Nvidia, which previously dominated China's AI chip market with over a 90% market share, has already been significantly impacted by sanctions imposed by the United States. This comes as the latest development in a series of trade blows between the United States and China. The US curbed exports to 140 companies in China last week, which has largely been reported as an attempt to restrict China's access to advanced AI technology. China responded by banning exports of key minerals such as gallium, germanium, and antimony to the US. This is not the first time Nvidia has been caught in such a trade crossfire. In 2022, a previous US sanction led the company to develop A100 and H100 chips tailor-made for the Chinese market. These versions were again restricted by the US in October 2023, prompting the company to release yet another set of modified chips for China. When Nvidia acquired Mellanox Technologies in 2020, Chinese authorities approved the deal with strict conditions. These included "fair, reasonable, and non-discriminatory" supply of GPU accelerators to China, allowing customers and distributors to acquire up to a year's inventory, and banning forced bundling, unreasonable terms, and purchase restrictions. The investigation echoes a previous high-profile antitrust case from 2013, when Qualcomm was fined $975 million for market abuse in wireless communication standardsâ€"at the time, the largest corporate fine China had ever imposed.

Nvidia's stock dips after China opens probe of the AI chip company for violating anti-monopoly laws

Shares of Nvidia fell Monday after China said it is investigating the high-flying U.S. microchip company over suspected violations of Chinese anti-monopoly laws. In a brief news release with few details, Chinese regulators appear to be focusing on Nvidia's $6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares fell 2.6% Monday. They are still up 180% so far this year. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have surged this year along with the California company's revenue and profit due to AI demand. According to data firm FactSet, about 16% of Nvidia's revenue comes from China, second only to its U.S.-generated revenue. A spokesperson for the company based in Santa Clara, California, said in an emailed statement that Nvidia is "happy to answer any questions regulators may have about our business." In its most recent earnings release, Nvidia posted revenue of $35.08 billion, up 94% from $18.12 billion a year ago. Nvidia earned $19.31 billion in the quarter, more than double the $9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to $3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. China's antitrust investigation follows a report this summer by technology news site The Information that the U.S. Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time. David Bieri, an international finance expert at Virginia Tech, said that China's investigation is "not about what Nvidia is doing in China, per se" but rather a signal to the incoming Trump administration. China, Bieri said, is looking to set the tone of future relations. The Chinese government, he said, is telling the U.S. "don't mess with us, because all of your darling corporations that your version of capitalism needs to prosper have entanglements" with China. Nvidia will have to revise its strategy in China or come up with provisions in their budgets for the type of uncertainty business with China will bring, Bieri said. "I don't think this is something that they can shake off," he said. "I also have a tremendous amount of faith in the brilliance of the management strategy of a corporation like Nvidia to not only pay attention to credit risk, market risk and operational risk, but also to political risk." Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, it replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival.

China probes Nvidia for 'violating' anti-monopoly law

Nvidia is also suspected of violating commitments it made in 2020 when it acquired Israeli data centre firm Mellanox. Recently, China and the United States have been clashing over exports of key chipmaking technology, where Nvidia is a major player.China on Monday launched an investigation into US chip giant Nvidia for allegedly violating its anti-monopoly laws, a top government agency said, as the two countries race for global chipmaking dominance. Beijing's state administration for market regulation, the authority on antitrust issues, launched the probe "in accordance with the law", according to a statement shared online. Nvidia is also suspected of violating commitments it made in 2020, the statement said, when it acquired Israeli data centre firm Mellanox. Shares in Nvidia dropped Monday after Beijing announced the probe. Nvidia did not immediately respond to a request for comment. China and the United States have in recent weeks clashed over exports of key chipmaking technology, where Nvidia is a major player. Beijing last week said it would restrict exports to the United States of some key components in making semiconductors, after Washington announced curbs targeting China's ability to make advanced chips. Among the materials banned from export are metals gallium, antimony and germanium, China's commerce ministry said in a statement that cited "national security" concerns. In its own latest curbs, Washington has announced restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional permission. The move expands Washington's efforts to curb exports of state-of-the-art chips to China, which can be used in advanced weapons systems and artificial intelligence. The new US rules also include controls on two dozen types of chipmaking equipment and three kinds of software tools for developing or producing semiconductors. The US tech behemoth has seen its profits soar on the back of strong demand for its artificial intelligence technology. In November, Nvidia surpassed Apple to become the highest-valued company in the world as the artificial intelligence boom continues to excite Wall Street. But the Chinese market has been a rare weak spot. The US government in 2023 restricted Nvidia from selling some of its top AI chips to China, which the US sees as a strategic competitor in the field of advanced semiconductors. Although Nvidia in November reported record high quarterly revenue, investors were wary of US-China tensions reheating with the return of Donald Trump to the White House. But during an event in Hong Kong last month, Nvidia's Taiwan-born CEO Jensen Huang told reporters "open science and open research in AI is absolutely global" and that "nothing" would stop that.

China probes Nvidia for 'violating' anti-monopoly law

China on Monday launched an investigation into US chip giant Nvidia for allegedly violating its anti-monopoly laws, a top government agency said, as the two countries race for global chipmaking dominance. Beijing's state administration for market regulation, the authority on antitrust issues, launched the probe "in accordance with the law", according to a statement shared online. Nvidia is also suspected of violating commitments it made in 2020, the statement said, when it acquired Israeli data center firm Mellanox. Shares in Nvidia dropped Monday after Beijing announced the probe. Nvidia did not immediately respond to a request for comment. China and the United States have in recent weeks clashed over exports of key chipmaking technology, where Nvidia is a major player. Beijing last week said it would restrict exports to the United States of some key components in making semiconductors, after Washington announced curbs targeting China's ability to make advanced chips. Among the materials banned from export are metals gallium, antimony and germanium, China's commerce ministry said in a statement that cited "national security" concerns. In its own latest curbs, Washington has announced restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional permission. The move expands Washington's efforts to curb exports of state-of-the-art chips to China, which can be used in advanced weapons systems and artificial intelligence. The new US rules also include controls on two dozen types of chipmaking equipment and three kinds of software tools for developing or producing semiconductors. The US tech behemoth has seen its profits soar on the back of strong demand for its artificial intelligence technology. In November, Nvidia surpassed Apple to become the highest-valued company in the world as the artificial intelligence boom continues to excite Wall Street. But the Chinese market has been a rare weak spot. The US government in 2023 restricted Nvidia from selling some of its top AI chips to China, which the US sees as a strategic competitor in the field of advanced semiconductors. Although Nvidia in November reported record high quarterly revenue, investors were wary of US-China tensions reheating with the return of Donald Trump to the White House. But during an event in Hong Kong last month, Nvidia's Taiwan-born CEO Jensen Huang told reporters "open science and open research in AI is absolutely global" and that "nothing" would stop that.

Amid Chip War, China Investigates Nvidia for Antitrust Violations

China is signaling it could crack down on Nvidia by launching an antitrust probe into the GPU vendor. On Monday, China's State Administration for Market Regulation announced the investigation over allegations that Nvidia violated the country's anti-monopoly laws. Details are scant, but the Chinese regulator will review Nvidia's years-old acquisition of Israeli-American company Mellanox, which designed networking products for supercomputers and data centers. In 2020, regulators worldwide, including in China, cleared the acquisition. However, China's State Administration for Market Regulation is indicating that Nvidia may have violated the deal's conditions. In response, the company told PCMag: "Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them. We work 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." Still, the investigation is raising concerns China is using the probe into Nvidia to hit back at the US for blocking AI-related tech exports to the country. Last week, the Biden administration made another attempt to do so by banning 140 Chinese companies from receiving memory chips and cutting-edge chip-making equipment. Two days later, Chinese chip industry groups declared US-made processors unsafe for use and urged local companies to source from domestic suppliers. However, chips industry analyst Patrick Moorhead says the antitrust investigation into Nvidia is all about the company's dominance in GPU sales to power generative AI. "Zero surprises here," he tweeted. "These things take 5-10 years to sort through. Quicker in China, but still very slow. All regions will be investigating Nvidia on datacenter GPUs at some point." Back in August, news emerged that the US Justice Department has also been scrutinizing the company's business, although Nvidia denies receiving a federal subpoena. In France, local regulators also raided an Nvidia office last year in an apparent effort to probe the company's dominance in the AI chip boom. Although the US has placed restrictions on GPU sales to China, Nvidia has still been shipping "export-complaint" products to the country. "From a geographic perspective, our data center revenue in China grew sequentially due to shipments of export-compliant Hopper products to industries," the company's CFO reported last month. "We expect the market in China to remain very competitive going forward."

Nvidia slides after China says it's probing the AI chip company for violating anti-monopoly laws

Shares of Nvidia slid early Monday after China said it is investigating the high-flying U.S. microchip company over suspected violations of Chinese anti-monopoly laws. In a brief press release with few details, Chinese regulators appear to be focusing on Nvidia's $6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares dipped 2.5% in morning trading Monday, falling below $140 each. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have nearly tripled this year with the California company revenue and profit soaring on AI demand. According to data firm FactSet, about 16% of Nvidia's revenue comes from China, second only to its U.S.-generated revenue. In its most recent earnings release, Nvidia posted revenue of $35.08 billion, up 94% from $18.12 billion a year ago. Nvidia earned $19.31 billion in the quarter, more than double the $9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to $3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, the Santa Clara, California-based tech giant replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival. China's antitrust investigation follows a report this summer by technology news site The Information that the U.S. Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time.

China probes Nvidia for 'violating' anti-monopoly law

Beijing (AFP) - China on Monday launched an investigation into US chip giant Nvidia for allegedly violating its anti-monopoly laws, a top government agency said, as the two countries race for global chipmaking dominance. Beijing's state administration for market regulation, the authority on antitrust issues, launched the probe "in accordance with the law", according to a statement shared online. Nvidia is also suspected of violating commitments it made in 2020, the statement said, when it acquired Israeli data center firm Mellanox. Shares in Nvidia dropped Monday after Beijing announced the probe. Nvidia did not immediately respond to a request for comment. China and the United States have in recent weeks clashed over exports of key chipmaking technology, where Nvidia is a major player. Beijing last week said it would restrict exports to the United States of some key components in making semiconductors, after Washington announced curbs targeting China's ability to make advanced chips. Among the materials banned from export are metals gallium, antimony and germanium, China's commerce ministry said in a statement that cited "national security" concerns. In its own latest curbs, Washington has announced restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional permission. The move expands Washington's efforts to curb exports of state-of-the-art chips to China, which can be used in advanced weapons systems and artificial intelligence. The new US rules also include controls on two dozen types of chipmaking equipment and three kinds of software tools for developing or producing semiconductors. The US tech behemoth has seen its profits soar on the back of strong demand for its artificial intelligence technology. In November, Nvidia surpassed Apple to become the highest-valued company in the world as the artificial intelligence boom continues to excite Wall Street. But the Chinese market has been a rare weak spot. The US government in 2023 restricted Nvidia from selling some of its top AI chips to China, which the US sees as a strategic competitor in the field of advanced semiconductors. Although Nvidia in November reported record high quarterly revenue, investors were wary of US-China tensions reheating with the return of Donald Trump to the White House. But during an event in Hong Kong last month, Nvidia's Taiwan-born CEO Jensen Huang told reporters "open science and open research in AI is absolutely global" and that "nothing" would stop that.

Nvidia slides after China says it's probing the AI chip company for violating anti-monopoly laws

Shares of Nvidia slid early Monday after China said it is investigating the high-flying U.S. microchip company over suspected violations of Chinese anti-monopoly laws. In a brief press release with few details, Chinese regulators appear to be focusing on Nvidia's $6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares dipped 2.5% in morning trading Monday, falling below $140 each. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have nearly tripled this year with the California company revenue and profit soaring on AI demand. According to data firm FactSet, about 16% of Nvidia's revenue comes from China, second only to its U.S.-generated revenue. In its most recent earnings release, Nvidia posted revenue of $35.08 billion, up 94% from $18.12 billion a year ago. Nvidia earned $19.31 billion in the quarter, more than double the $9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to $3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, the Santa Clara, California-based tech giant replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival. China's antitrust investigation follows a report this summer by technology news site The Information that the U.S. Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time.

Nvidia shares slide after China launches probe of suspected...

Shares of Nvidia slid early Monday after China said it is investigating the high-flying microchip company over suspected violations of Chinese anti-monopoly laws. In a brief press release with few details, Chinese regulators appear to be focusing on Nvidia's $6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares dipped 3% on Monday, falling below $140. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have nearly tripled this year with the California company revenue and profit soaring on AI demand. According to data firm FactSet, about 16% of Nvidia's revenue comes from China, second only to its US-generated revenue. In its most recent earnings release, Nvidia posted revenue of $35.08 billion, up 94% from $18.12 billion a year ago. Nvidia earned $19.31 billion in the quarter, more than double the $9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to $3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, the Santa Clara, Calif.-based tech giant replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival. China's antitrust investigation follows a report this summer by technology news site The Information that the Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time.

Nvidia Slides After China Says It's Probing the AI Chip Company for Violating Anti-Monopoly Laws

Shares of Nvidia slid early Monday after China said it is investigating the high-flying U.S. microchip company over suspected violations of Chinese anti-monopoly laws. In a brief press release with few details, Chinese regulators appear to be focusing on Nvidia's $6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares dipped 2.5% in morning trading Monday, falling below $140 each. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have nearly tripled this year with the California company revenue and profit soaring on AI demand. According to data firm FactSet, about 16% of Nvidia's revenue comes from China, second only to its U.S.-generated revenue. In its most recent earnings release, Nvidia posted revenue of $35.08 billion, up 94% from $18.12 billion a year ago. Nvidia earned $19.31 billion in the quarter, more than double the $9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to $3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, the Santa Clara, California-based tech giant replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival. China's antitrust investigation follows a report this summer by technology news site The Information that the U.S. Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time. Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

China launches an antitrust investigation into Nvidia as it wrestles with the US over AI chip sanctions

Chinese regulators believe Nvidia may have violated the terms of approval of the company's $7 billion acquisition of Mellanox Technologies in 2020. China has launched an antitrust investigation into Nvidia over possible violations of the country's anti-monopoly laws in connection with its 2020 acquisition of Israeli chip maker Mellanox Technologies. A Bloomberg report (via The Verge) says the Chinese government approved the $7 billion deal on the condition that Nvidia not discriminate against Chinese companies, and that Mellanox provide samples of new products to competing companies within 90 days of making them available to Nvidia to ensure they can maintain performance parity. Details about the investigation weren't shared, but it's notable because of US sanctions that restrict Nvidia's ability to export products to China. Nvidia has attempted to get around those restrictions by designing certain products specifically for the Chinese market: When the US Department of Commerce introduced restrictions on RTX 4090 GPUs in 2023, for instance, Nvidia quickly whipped up the RTX 4090 D, an export-only model built exclusively for China that was designed to get around export controls. The US government indicated its displeasure with that approach in 2023, however: US Commerce Secretary Gina Raimondo said at the Reagan National Defense Forum in December of that year that "we cannot let China get these chips, period," before warning, "If you redesign a chip around a particular cut line that enables them to do AI, I'm going to control it the very next day." China was a major export market for Nvidia prior to the sanctions, according to The Guardian, but it now faces increasing competition from Chinese manufacturers: The country was responsible for 17% of Nvidia's revenue over the year ending in January 2024, down significantly from 26% just two years earlier. The investigation into Nvidia isn't China's only pushback against aggressive US sanctions against the country. CNN reported last week that, following the introduction of new restrictions on the sale of equipment used to manufacture semiconductors and other points of access to US technology, China banned the sale of various materials used in the construction of semiconductors and electric vehicle batteries including gallium, germanium, antimony and other "super hard" materials. "Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them," an Nvidia representative said in a statement provided to PC Gamer. "We work 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."

Chinese regulators are investigating NVIDIA for potential antitrust violations

NVIDIA, graphics chip maker and recent backbone of the AI industry, is under investigation by Chinese regulators over potential antitrust violations, . The concerns center on the acquisition of Mellanox Technologies, a computer networking company . As part of the conditions of that acquisition, Chinese regulators required NVIDIA to "provide information about new [Mellanox] products to rivals within 90 days of making them available to NVIDIA," . China's State Administration for Market Regulation is kicking off its investigation because it believes that those terms were violated. This wouldn't be the first time NVIDIA has been investigated for monopolistic behavior - The US Department of Justice reportedly launched into NVIDIA in September 2024 - but it has a different flavor in the context of the escalating trade war between the US and China. On December 1, the US Department of Commerce announced export restrictions and sanctions on 140 Chinese companies producing chipmaking tools, and on "China-bound shipments of high bandwidth memory chips," . The goal was fairly clear: the US wanted to limit China's ability to develop advanced AI by preventing it from creating the kind of chips used to train and run it. This fight goes both ways, of course. It seems safe to say that the on all shipments of gallium, germanium, and antimony to the US was a response. Threatening NVIDIA makes sense on a few fronts. The company's H100 GPUs were used to train the vast majority of generative AI models used today, something that doesn't seem likely to change with the Blackwell chips . That's made it as AI speculation has run rampant, and a big target for governmental oversight. Plus, Bloomberg writes that NVIDIA gets some 15 percent of its revenue from China. However the investigation resolves, NVIDIA feels like a logical next step to escalate the US and China's conflict even further.

China opens investigation into Nvidia over potential antitrust violations

The inquiry, a rare move by Beijing, comes a week after the Biden administration expanded curbs on the sale of advanced U.S. technology to China. In the days since, the Chinese government announced that it would ban the export of several rare minerals to the United States and imposed sanctions on more than a dozen U.S. defense firms and defense industry executives.China's anti-monopoly regulator announced Monday that it was investigating potential violations of antitrust law by Nvidia, the U.S. company that makes a vast majority of the computer chips that power artificial intelligence systems. The inquiry, a rare move by Beijing, comes a week after the Biden administration expanded curbs on the sale of advanced U.S. technology to China. In the days since, the Chinese government announced that it would ban the export of several rare minerals to the United States and imposed sanctions on more than a dozen U.S. defense firms and defense industry executives. Together, the moves by Beijing signal its willingness to engage in supply chain warfare as the policy contest over trade and the control of technology escalates between the world's two largest economies. The battle has made AI chips into one of the world's most sought-after technologies, and Nvidia has cornered the market, accounting for 90% of global sales by the end of last year. Nvidia's dominance helped it become one of the most valuable companies in the world over the past year. China's State Administration for Market Regulation said Monday that it was investigating Nvidia for violating commitments made during its acquisition of Mellanox Technologies, a company that makes computer networking equipment. The Chinese regulator approved Nvidia's acquisition of the company in 2020 with conditions to prevent anti-competitive practices and ensure supplies to China. Nvidia said in a statement that it was "happy to answer" questions from China's regulators. "We work hard to provide the best products we can in every region and honor our commitments everywhere we do business," the statement said. As the Biden administration has progressively tightened restrictions on Nvidia's chip sales to China, the company has responded by offering less powerful versions of its chips to the Chinese market. Officials in Washington, in trying to prevent Chinese companies from buying advanced chips and the machines to make them, say that the technology is essential not just for smartphones and chatbots but also for military superiority. Chinese tech companies have resorted to stockpiling the chips, while also turning to smugglers and front companies to secure supplies. At the same time, Beijing is pouring large sums of money into its own chip companies in an attempt to make its tech sector less reliant on foreign technology.

Nvidia Faces Antitrust Investigation in China

China's antitrust regulator announced on Monday that it had opened an antitrust investigation into Nvidia, the American company that makes the vast majority of the computer chips that power artificial intelligence systems. The probe comes a week after the Biden administration expanded curbs on the sale of advanced American technology to China. In response, the Chinese government last week announced it would ban the export of several rare minerals to the United States and imposed sanctions on more than a dozen U.S. defense firms and defense industry executives. Together, the moves by Beijing signal its willingness to engage in supply chain warfare as the trade war escalates between the world's two largest economies. China's State Administration for Market Regulation said on Monday that it was investigating Nvidia for violating commitments made during its acquisition of Mellanox Technologies, a company that makes computer networking equipment. The Chinese regulator conditionally approved Nvidia's acquisition of the company in 2020. Nvidia's dominance over the essential building blocks of advanced A.I. systems has helped it become one of the world's most valuable companies over the past year. This is a developing story. Please check back for updates.

China Probes Nvidia Amid Escalating A.I. Chip Tensions With US: What to Know

China is looking into Nvidia's acquisition of an Israeli company it approved in 2020. Just two weeks after Nvidia (NVDA) CEO Jensen Huang lauded China's contributions to A.I. research in Hong Kong, the Chinese government has launched an antitrust investigation into the Santa Clara, Calif.-based company amid escalating geopolitical tensions with the U.S. and uncertainties around the incoming Trump administration. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters China's State Administration of Market Regulation is looking into Nvidia's 2020 acquisition of Mellanox, an Israeli company that makes computer networking equipment, Chinese media reported today (Dec. 9). China approved Nvidia's $6.9 billion purchase of Mellanox under the condition that the Israeli company would provide samples of new products to rivals within 90 days of making them available to Nvidia, according to Bloomberg, which noted that China's approval was needed due to the size of its economy and semiconductor market. The deal also received merger control approval from authorities in the U.S., Israel, Mexico and the European Union. In a statement to Observer, Nvidia said it is happy to answer any questions regulators have about its business. "Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them," said the chipmaker. "We work hard to provide the best products we can in every region and honor our commitments everywhere we do business." The investigation is the latest jab in an escalating semiconductor battle between the U.S. and China, which was described by China's Commerce Ministry as an "abuse of control measures" and a "typical act of economic coercion." Earlier this month, the Biden administration enacted another round of chip export controls in the country, following previous efforts to curb China's access to advanced A.I. chips. The country retaliated by banning the export of gallium, germanium, antimony and other superhard materials to the U.S. These materials have various high-tech and military applications. Previous measures from the U.S. have limited Nvidia from selling advanced GPUs to China since 2022. President-elect Donald Trump is expected to maintain these measures and the Biden administration's tough-on-China stance. Nvidia stock drops amid antitrust probe Nvidia shares fell more than 3 percent today in response to the news. The past year has been lucrative for the chipmaker, which has seen its stock surging by nearly 200 percent to claim a market cap of $3.38 trillion, making it the world's second most valuable company behind Apple (AAPL) and boosting the wealth of its founder and CEO to an estimated $120.5 billion. Surging demand for the GPUs underpinning A.I. applications has propelled Nvidia to become the industry leader in A.I. chips, with a 70 percent to 95 percent share of the market, according to Mizuho Securities. The chipmaker, which reported a 94 percent jump in revenue year-over-year to $35 billion during the last quarter, counts tech giants like Meta (META), Microsoft (MSFT), Google (GOOGL) and Amazon (AMZN) among its largest clients. In China, however, Nvidia has lost ground amid tough export controls. Its sales in the country made up 15 percent of its total sales in the quarter ended September, a dip from 26 percent a year ago. Huang himself has urged for a positive relationship between the U.S. and China when it comes to technological advances, lauding China's contributions to A.I. research. "Open research is one of the miracles of modern science and perhaps the ultimate form of global cooperation -- one that we must protect," the CEO said while receiving an honorary doctorate from the Hong Kong University of Science and Technology last month.

Nvidia stock tumbles on news of China investigation: Is the AI chip giant in trouble?

In a move that underscores growing geopolitical trade tensions, Chinese authorities have reportedly launched an antitrust investigation into U.S. chip giant Nvidia, raising concerns about the implications for foreign businesses operating in the country. The State Administration for Market Regulation (SAMR) announced the probe today, according to several media reports, including from CNBC and Barron's. A statement from the regulator reportedly cited suspected violations of anti-monopoly laws, though specific allegations remain undisclosed. News of the investigation follows the Biden administration's move last week to curb sales of chip technology to China. Nvidia, a global leader in advanced computing and AI chip technologies, plays a pivotal role in China's tech ecosystem. Its products are integral to industries such as autonomous vehicles, artificial intelligence, and smart infrastructure -- sectors central to Beijing's technological ambitions.

China opens antitrust probe into Nvidia | TechCrunch

When it comes to market capitalization, Nvidia is currently the second-biggest public company in the world, behind Apple. That's why all eyes are on Nvidia these days. And now, as Bloomberg spotted, China Central Television, a public TV broadcaster, is reporting that China's market regulator has opened a probe into Nvidia's acquisition of Mellanox. If that name doesn't sound familiar, in 2019, Nvidia spent nearly $7 billion to acquire Mellanox, an Israel-based company working on high-performance chips for supercomputers. The Chinese government approved the acquisition in exchange for several commitments. Among other things, Nvidia (and Mellanox) promised that they would share information about new products with Nvidia's rivals within 90 days of release. Similarly, Nvidia also agreed to let Chinese chipmakers test their products with Mellanox's technology in order to make sure that they work well. Nvidia is currently in an uncomfortable position, as Washington has implemented restrictions on semiconductor manufacturers -- including Nvidia. They can't sell their most advanced AI chips to Chinese companies. This has led to retaliations from the Chinese government. For instance, China has banned some sales of Micron products following a cybersecurity probe. Today's investigation seems to be the latest twist in the ongoing economic conflict that opposes China and the U.S. over key technologies, including state-of-the-art GPUs for generative AI training and inference. Financial analysts estimate that the top 7 big tech companies will report profit growth of 18% in 2025. But if you remove Nvidia from that group, profits will only grow by 3% in 2025. That shows how important artificial intelligence has become for economic growth. Last week, the Biden administration announced wider trade bans on advanced technology, with a specific focus on chips that can be used for military equipment and artificial intelligence.

What is driving Nvidia's stock down 2.55%: Clues point to China

Nvidia is under investigation by Chinese regulators for possible violations of antimonopoly laws, following the U.S. government's announcement of new export controls targeting China's chip industry. The State Administration for Market Regulation is examining Nvidia's $6.9 billion acquisition of Mellanox Technologies as part of the probe. China's investigation emerges amid heightened tensions between the U.S. and China regarding technology and trade. The scrutiny over Nvidia's practices aligns with the recent actions of the U.S. Department of Justice, which is reportedly conducting its own investigation into Nvidia for alleged abuses of its market dominance. This includes claims that Nvidia has threatened to penalize customers engaging with both its products and those of its competitors. Nvidia, a major player in the AI chip market with a valuation exceeding $3.4 trillion, has seen its shares drop 2.55% following news of this investigation. Despite the decline, Nvidia's stock has surged by approximately 180% this year, reflecting robust demand for its advanced chips among tech giants. The company derives about 15% of its revenue from China, making its market presence significant despite ongoing restrictions and scrutiny. The Chinese government has not detailed the investigation's ramifications, leaving analysts to speculate on its potential impact. Ian Chong, a political scientist in Singapore, indicated that the probe serves as a symbolic gesture rather than a substantial threat to Nvidia, as the company is already limited in its operations within China. China's recent steps, including a ban on the export of critical materials like gallium and germanium to the U.S., illustrate a tit-for-tat exchange in trade relations. The investigation appears to be aimed at Nvidia's earlier acquisition of Mellanox Technologies, approved under stringent conditions that required nondiscriminatory treatment of Chinese suppliers. Since the approval in 2020, Nvidia has faced growing market scrutiny due to its dominance in AI chip production, which is a focal point of technology competitions between the two powers. A spokesperson for Nvidia expressed willingness to cooperate with regulators, stating, "We are happy to answer any questions regulators may have about our business." In the latest quarterly earnings report, Nvidia announced a revenue of $35.08 billion for the period, a substantial increase from the previous year. Alongside its China strategy, Nvidia has been actively navigating U.S. export controls. Reports suggest the company plans to partner with Chinese firm Inspur to deliver a new AI chip specifically intended for the Chinese market by mid-2025. This arrangement may provide Nvidia with a way to maintain its business interests in China despite the ongoing scrutiny from both U.S. and Chinese regulators. Nvidia is not the sole target of regulatory scrutiny in this complex international landscape. Other U.S. companies, such as Intel, have faced similar investigations. In October, China's Cybersecurity Association called for a security review of Intel products, raising concerns related to potential surveillance. Additionally, U.S. regulators previously restricted Micron Technology from operating in critical sectors following a security review that found compliance issues. The startups Nvidia thinks are the future of AI David Bieri, an international finance expert, noted that the investigation may symbolize a warning to the incoming Trump administration about China's capabilities in retaliating against perceived injustices in trade relations. The situation highlights the intricate entanglements of U.S. corporations with Chinese markets and underscores the potential political risks involved in cross-border business activities. Investors and market observers will be keenly watching how this situation develops, especially regarding the implications for Nvidia's operations in China and its overall business strategy. Future steps taken by both the U.S. and Chinese governments may further exacerbate tensions and influence the direction of international tech markets. Current investigations are ongoing, leaving uncertainty regarding how these latest developments will unfold for Nvidia and the broader semiconductor industry. Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Nvidia's stock dips after China opens probe

(AP) - Shares of Nvidia fell Monday after China said it is investigating the high-flying US microchip company over suspected violations of Chinese anti-monopoly laws. In a brief news release with few details, Chinese regulators appear to be focusing on Nvidia's USD6.9 billion acquisition of network and data transmission company Mellanox in 2019. Nvidia shares fell 2.6 per cent Monday. They are still up 180 per cent so far this year. Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market's biggest companies, as tech giants spend heavily on the company's chips and data centers needed to train and operate their AI systems. Nvidia's shares have surged this year along with the California company's revenue and profit due to AI demand. According to data firm FactSet, about 16 per cent of Nvidia's revenue comes from China, second only to its US-generated revenue. A spokesperson for the company based in Santa Clara, California, said in an emailed statement that Nvidia is "happy to answer any questions regulators may have about our business." In its most recent earnings release, Nvidia posted revenue of USD35.08 billion, up 94 per cent from USD18.12 billion a year ago. Nvidia earned USD19.31 billion in the quarter, more than double the USD9.24 billion it posted in last year's third quarter. The earnings release did not break out revenue from China. The company's market value rocketed to USD3.5 trillion recently, passing Microsoft and briefly overtaking Apple as the world's most valuable company. China's antitrust investigation follows a report this summer by technology news site The Information that the US Justice Department was investigating complaints from rivals that Nvidia was abusing its market dominance in the chip sector. The allegations reported include Nvidia threatening to punish those who buy products from both itself and its competitors at the same time. David Bieri, an international finance expert at Virginia Tech, said that China's investigation is "not about what Nvidia is doing in China, per se" but rather a signal to the incoming Trump administration. China, Bieri said, is looking to set the tone of future relations. The Chinese government, he said, is telling the US "don't mess with us, because all of your darling corporations that your version of capitalism needs to prosper have entanglements" with China. Nvidia will have to revise its strategy in China or come up with provisions in their budgets for the type of uncertainty business with China will bring, Bieri said. "I don't think this is something that they can shake off," he said. "I also have a tremendous amount of faith in the brilliance of the management strategy of a corporation like Nvidia to not only pay attention to credit risk, market risk and operational risk, but also to political risk." Nvidia's invention of graphics processor chips, or GPUs, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Last month, it replaced Intel on the Dow Jones Industrial Average, ending the pioneering semiconductor company's 25-year run on the index. Unlike Intel, Nvidia designs but doesn't manufacture its own chips, relying heavily on Taiwan Semiconductor Manufacturing Co., an Intel rival.

China Targets Nvidia For Potential Breaches of Anti-Monopoly Law

(Bloomberg) -- China has opened a probe into Nvidia Corp. over suspicions that the US chipmaker has broken anti-monopoly laws. The State Administration for Market Regulation opened an investigation looking into the company's recent behavior, China Central Television said in a report on Monday. Nvidia's position as the leading provider of AI chips has put it in the crossfire of the US-China battle of tech supremacy. Washington has barred the company from selling its most advanced semiconductors to Chinese companies -- undermining their ability to develop AI services -- which has drawn sharp rebukes from Beijing. Nvidia has repeatedly tried to develop AI chips that will comply with US controls and give Chinese customers some ability to work on the critical new technology.

China is probing Nvidia on suspicion of anti-monopoly law breaches; shares fall By Investing.com

Nvidia shares fell more than 2% in premarket trading. The State Administration for Market Regulation is examining the chipmaker's recent actions. Nvidia, a dominant player in the AI chip market, has found itself at the center of the escalating tech competition between the US and China. Restrictions imposed by Washington prevent the company from selling its most advanced chips to Chinese firms, limiting their capacity to advance AI technologies -- a move that has sparked criticism from Beijing. Nvidia has made several efforts to design AI chips that adhere to US export rules while still providing Chinese clients with tools to develop key technology.

Nvidia hit with China probe as tech war with US escalates

Gift 5 articles to anyone you choose each month when you subscribe. China has opened a probe into Nvidia over suspicions that the US chipmaker broke anti-monopoly laws around a 2020 deal, taking aim at the AI heavyweight as Washington ramps up sanctions. The State Administration for Market Regulation opened an investigation into the company's recent behaviour as well as the circumstances surrounding the acquisition of Mellanox Technologies, the government said in a statement on Monday. Beijing gave approval for the deal four years ago, on condition that Nvidia not discriminate against Chinese companies.

China is going after Nvidia

Booking.com's AI trip planner aims to feel like a human, CEO Glenn Fogel says The country's State Administration for Market Regulation has launched a probe into whether Nvidia's acquisition of Israeli chip designer Mellanox Technologies violated anti-monopoly laws, according to a report from China Central Television on Monday. Shares of Nvidia fell nearly 2% in pre-market trading on Monday. The leading artificial intelligence chipmaker bought Mellanox for $6.9 billion in 2020 after receiving conditional approval from Chinese authorities. Conditions included requirements that Nvidia and Mellanox not bundle or tie together products, continue to supply on fair terms, and ensure that chips from Chinese manufacturers worked with the technology. Other requirements were aimed at maintaining independence between the two firms, and lessening any potential impacts of export controls amid the trade war between the U.S. and China that began in 2018 under the first Trump administration. This comes as chip trade tensions between the two economic superpowers continue to escalate. Last week, the Department of Commerce introduced more restrictions on the sale of high-bandwidth memory and chipmaking tools to China, including tools produced by U.S. companies abroad. The new rules include controls on 24 types of semiconductor manufacturing equipment, as well as on three types of software tools that can be used to develop or produce chips, the Commerce Department's Bureau of Industry and Security said.d Another 140 unnamed Chinese entities -- including semiconductor fabs, tool companies, and investment firms -- accused of working on behalf of the Chinese government were added to the U.S. trade blacklist. According to the agency, the curbs are aimed at slowing China's advanced AI developments that have "the potential to change the future of warfare" and "impairing" China's development of its chip ecosystem.

China's Nvidia probe escalates chip war with U.S.

Conway Gittens: I'm Conway Gittens reporting from the New York Stock Exchange. Here's what we're watching on TheStreet today. Wall Street is keeping a watchful eye on energy prices. Oil is trading higher Monday after the Bashar al-Assad regime was toppled in Syria. Investors are wondering how this might shake-up geopolitics in the oil-rich Middle East. In other business headlines, a battle for dominance in the semiconductor world is heating up between China and the United States. Related: Nvidia stock reacts to China's latest shot in the technology trade war China has opened an investigation into Wall Street AI chip darling Nvidia (NVDA) for possible anti-competitive practices. The probe, while not specific, revolves around Nvidia's purchase of an Israeli company called Mellanox. Chinese authorities claim the deal could be a violation of its anti-monopoly laws. Nvidia, right now, is arguably the most-visible leader in the battle to supply chips for artificial intelligence. It is dominating the market and is seen as a symbol of American innovation. For that reason, Beijing may see Nvidia as a pawn in a long-running battle with the U.S. over which country will lead the AI revolution. In December, the outgoing Biden Administration pushed through a third round of Chinese sales restrictions. Washington has expressed deep concern that Beijing may use AI chips to gain a military advantage. There are also concerns China could be trying to steal vital AI software. China has retaliated by banning exports to the U.S. of certain raw materials that are used to make semiconductors. That'll do it for your Daily Briefing. From the New York Stock Exchange, I'm Conway Gittens with TheStreet. More on Big Tech: