China launches antitrust probe into Nvidia

China launched an anti-monopoly investigation into Nvidia on Monday, targeting alleged violations related to its 2020 acquisition of Israeli company Mellanox Technologies. The probe, announced by China’s State Administration for Market Regulation, coincides with escalating US-China tensions in the semiconductor industry.

The California-based company is a major player in the tech space and a global supplier of advanced AI chips. China is important to the chipmaker; last year, the company made more than $13 billion in revenue from China—12% of its global revenue.

Tensions escalate in chip trade war
In 2022, the US imposed export curbs on advanced semiconductor tech, which stopped Nvidia from directly selling to China.

Last week, Washington further curbed exports, which saw restrictions on sales to 140 companies without special permission. In response, Beijing embargoed exports of critical minerals like gallium and germanium. 

Nvidia, which dominated China’s AI chip market with over 90% share before US sanctions, faces growing competition in the region from firms like Huawei.

Market and industry reactions
While Nvidia’s shares dipped 2.5% after the announcement, analysts suggest the probe’s short-term impact may be limited since many of Nvidia’s advanced chips are already banned from sale in China. 

Nvidia stated its commitment to meeting regulatory requirements and continuing business operations globally.

China previously fined Qualcomm $975 million in 2013 under a similar anti-monopoly investigation.