In an era where technology and global politics are intricately linked, the spotlight is on the young tech community as the battle between major players in the artificial intelligence and semiconductor industries intensifies.
Nvidia, a key company in the AI revolution, now finds itself at the heart of this geopolitical struggle. With tensions escalating between the U.S. and China, China is launching an investigation into Nvidia over potential violations of its anti-monopoly laws.
This move raises important questions about the future of AI chips and the global tech supply chain dynamics.
Nvidia has been one of the many companies caught in the crossfire of the U.S.-China tensions. Earlier U.S. export curbs restricted Nvidia’s ability to sell its most advanced AI chips to China, prompting the company to develop China-specific versions of its products that comply with U.S. export regulations.
On Monday, China announced that it had opened an investigation into Nvidia Corp (NVDA.O) over suspected violations of its anti-monopoly law, which was widely interpreted as a response to the latest U.S. restrictions on China’s semiconductor sector.
The State Administration for Market Regulation (SAMR) released a statement regarding the probe but did not provide details on how Nvidia, a leading provider of AI and gaming chips, may have breached China’s anti-monopoly regulations.
Additionally, the U.S. chipmaker is suspected of failing to uphold commitments made during its acquisition of Israeli chip designer Mellanox Technologies, as outlined in the conditional approval granted by the regulator in 2020.
This investigation comes after the U.S. recently launched its third crackdown in three years on China’s semiconductor industry, imposing restrictions on 140 companies, including chip equipment manufacturers.
Nvidia has not yet responded to requests for comment, and the company’s shares fell 2.2% in pre-market trading in New York following the Chinese announcement.
In retaliation, China swiftly responded by imposing a ban on the export of critical minerals—gallium, germanium, and antimony—to the U.S. Furthermore, on the same day, four major Chinese industry associations issued a rare joint statement urging Chinese companies to avoid purchasing U.S. chips, claiming they were now “unsafe,” and to source them locally instead.
Before these restrictions, Nvidia held a dominant 90% share of China’s AI chip market. However, it now faces growing competition from local rivals, particularly Huawei. China accounted for approximately 17% of Nvidia’s revenue in the year ending January, down from 26% two years ago.