China has launched an antitrust investigation into Nvidia, the U.S. chipmaker renowned for its artificial intelligence and gaming processors. Announced on Monday by the State Administration for Market Regulation, the probe investigates Nvidia’s alleged violations of China’s anti-monopoly law and commitments made during its acquisition of Israeli chip designer Mellanox Technologies in 2020. While specifics of the violations were not disclosed, the move signals heightened tensions between Beijing and Washington amid escalating restrictions on the semiconductor industry.
Nvidia, whose shares dipped 2.5% on Monday following the announcement, responded by affirming its compliance. A spokesperson stated the company strives to provide quality products globally and adheres to commitments in all operating regions. “We are happy to answer any questions regulators may have about our business,” the spokesperson added.
The investigation follows the U.S. government’s recent restrictions targeting China’s semiconductor industry. Washington’s measures, the third in three years, blocked exports to 140 entities, including chip equipment manufacturers, exacerbating an already fraught relationship. China’s response has been swift, including export bans on critical minerals such as gallium, germanium, and antimony, essential for chipmaking.
Beijing’s latest move underscores its resolve to counter U.S. actions. Industry associations in China issued a rare, coordinated call for domestic companies to reduce reliance on American chips, citing security concerns, and shift purchases to local suppliers.
Experts view the Nvidia probe as part of this broader strategy. Bob O’Donnell, chief analyst at TECHnalysis Research, downplayed the immediate impact of the investigation on Nvidia. “Most of Nvidia’s advanced chips are already restricted from being sold into China due to U.S. export controls,” O’Donnell noted, emphasizing that Beijing’s ability to influence the U.S. semiconductor industry has waned over time.
Nvidia, which once dominated China’s AI chip market with over 90% share, has faced mounting challenges. Earlier U.S. export curbs forced the company to create China-specific chip versions. China now accounts for 17% of Nvidia’s revenue, a notable decline from 26% two years ago, as domestic rivals like Huawei rise to compete.
Nvidia’s 2020 Mellanox acquisition had previously received conditional approval from China, with regulatory stipulations aimed at safeguarding competition. Conditions included bans on forced product bundling and discriminatory practices. Historical precedent suggests that antitrust probes in China can lead to significant penalties, as seen in Qualcomm’s $975 million fine in 2013 for anticompetitive behavior.
China’s antitrust investigation into Nvidia appears to be more than a routine regulatory action—it’s a calculated response to the intensifying semiconductor war with the United States. By targeting a leading American chipmaker, Beijing is sending a clear message that it will not sit idly while Washington tightens its grip on technology exports. However, the probe may have limited impact on Nvidia’s operations in the short term, as U.S. export restrictions have already curtailed the company’s ability to sell its most advanced chips in China. This tit-for-tat escalation risks further fragmenting the global semiconductor supply chain, which could have long-term consequences for innovation and economic stability in both nations.
