China has launched an investigation into Nvidia, a leading chipmaker, for alleged violations of the country's anti-monopoly laws.
The investigation also focuses on Nvidia's commitments made during its 2020 acquisition of Israeli chip designer Mellanox Technologies.
A spokesperson for Nvidia stated that the company strives to provide the best products worldwide and honor its commitments.
China has launched an investigation into Nvidia, a leading chipmaker, for alleged violations of the country’s anti-monopoly laws. The State Administration for Market Regulation revealed the probe but did not specify how Nvidia, known for its artificial intelligence and gaming chips, may have breached the laws.
The investigation also focuses on Nvidia’s commitments made during its 2020 acquisition of Israeli chip designer Mellanox Technologies. At that time, China’s approval of the deal came with conditions, including prohibitions on forced product bundling, unfair trading practices, and discriminatory treatment of customers. Nvidia is suspected of failing to adhere to these commitments.
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A spokesperson for Nvidia stated that the company strives to provide the best products worldwide and honor its commitments. “We are happy to answer any questions regulators may have about our business,” the spokesperson said, reports Reuters. Despite this assurance, Nvidia’s shares fell 2.5 percent on Monday.
The timing of the investigation is seen as a response to recent US actions against China’s chip industry. Last week, Washington implemented its third round of restrictions in three years, curbing exports to 140 Chinese companies, including chip equipment manufacturers.
China has retaliated strongly. It banned the export of critical minerals like gallium, germanium, and antimony to the US and encouraged Chinese companies to buy domestic chips instead of relying on American suppliers. Several Chinese industry associations also issued a statement urging companies to consider US chips as “no longer safe.”
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“It’s (the probe) unlikely to have much of an impact on the company, particularly in the near term, because most of Nvidia’s most advanced chips are already restricted from being sold into China,” said Bob O’Donnell, chief analyst at TECHnalysis Research.
Before these restrictions, Nvidia held over 90 percent of China’s AI chip market. However, its revenue from China dropped to 17 percent in the last fiscal year, compared to 26 percent two years earlier. Local competitors like Huawei are also increasing their market presence.
The last high-profile anti-monopoly investigation into a foreign tech firm in China occurred in 2013 when Qualcomm was fined $975 million for abusing its market position. Whether Nvidia faces similar consequences remains to be seen.
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Ayushi Jain
Tech news writer by day, BGMI player by night. Combining my passion for tech and gaming to bring you the latest in both worlds. View Full Profile
