China has initiated an investigation into Nvidia Corp over potential violations of the country's anti-monopoly laws, as retaliation against the United States' recent restrictions on the Chinese chip sector. The State Administration for Market Regulation (SAMR) announced the probe without specifying the exact nature of Nvidia's alleged violations. The probe also encompasses Nvidia's acquisition of Mellanox Technologies, with suspicions that the company may have breached commitments made during the deal's conditional approval in 2020.
This move comes following the U.S.'s latest crackdown on China's semiconductor industry, where exports to 140 companies, including chip equipment manufacturers, were restricted. Despite the investigation, analysts believe the impact on Nvidia in the short term may be minimal, as most of its advanced chips are already restricted from sale in China. Nevertheless, Beijing's response indicates a firm stance against U.S. actions, evidenced by the recent ban on exports of critical minerals to the United States and warnings to Chinese companies against purchasing U.S. chips.
Nvidia's involvement in the U.S.-China tensions has been ongoing, with past restrictions preventing the sale of advanced AI chips to China. This compelled Nvidia to develop China-specific versions compliant with export controls. While Nvidia previously dominated the Chinese AI chip market, facing competition from local rivals, its Chinese revenue has seen a decline. The acquisition of Mellanox Technologies in 2020 saw approval from China, subject to specific conditions to prevent unfair practices within Nvidia's China operations.
The last notable anti-monopoly probe against a foreign technology company in China was back in 2013 with Qualcomm's local subsidiary. Qualcomm faced allegations of overcharging and market position abuse, leading to a substantial fine. As the U.S.-China tech rivalry escalates, the Nvidia probe adds another layer to the complex dynamics shaping the global semiconductor industry.