Nvidia stock slipped more than 3 per cent yesterday after China opened an antitrust investigation into the chip giant amid escalating tensions between Beijing and Washington over artificial intelligence dominance.
The probe is aimed at Nvidia’s practices regarding possible anti-monopoly violations. It is also set to examine its 2020 acquisition of Mellanox, a purchase that was approved by China’s State Administration for Market Regulation under the condition that the chipmaker would avoid discriminating against Chinese companies.
According to a Chinese media report, the government believes Nvidia’s $7 billion purchase of the Israeli computer networking equipment maker may have violated Beijing’s anti-monopoly rules.
In a statement released yesterday morning an Nvidia spokesperson wrote: “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.”
The probe comes about a week after the Biden administration implemented another round of semiconductor export restrictions aimed at limiting China’s access to advanced chips.
The latest US measures include curbing high bandwidth memory chips shipped to China, crucial components for AI training.
The Chinese probe against the most important US chipmaker also comes ahead of Donald Trump’s return to the White House next month. Trump has threatened increased tariffs as part of his policy.
“This isn’t just a regulatory issue; it’s a calculated geopolitical manoeuvre,” Nigel Green, CEO of financial advisory deVere Group, wrote yesterday.
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