In a bold escalation of tech geopolitics, China unveiled an anti-monopoly investigation into Nvidia Corp on Monday, targeting one of the most influential names in artificial intelligence (AI) and gaming chips. The State Administration for Market Regulation (SAMR) has accused the U.S. chipmaking giant of potential breaches of Chinese anti-monopoly laws and conditions tied to its 2020 acquisition of Mellanox Technologies. While SAMR’s statement offered little in the way of detail, the timing of the move leaves little doubt: this is Beijing’s latest salvo in the escalating U.S.-China chip war.
The probe comes mere days after Washington tightened its chokehold on China’s semiconductor ambitions, cutting off vital chip equipment exports to dozens of Chinese firms. Beijing responded with a one-two punch: banning the export of crucial minerals like gallium and germanium and urging Chinese companies to “buy local” to reduce reliance on U.S. tech. Nvidia, a key player caught in the crossfire, has seen its market share in China dwindle from 26% to 17% in just two years, with homegrown rivals like Huawei stepping into the vacuum. Nvidia’s shares reflected the tension, sliding 2.2% in pre-market trading after the announcement.
For Nvidia, this isn’t its first dance with export curbs. Earlier U.S. restrictions forced the company to modify its AI chips to comply with American rules while continuing to serve Chinese customers. But now, the company faces another uphill battle: fending off accusations of unfair practices linked to its Mellanox merger. China’s approval of that acquisition came with strings attached, including a ban on forced product bundling and discriminatory sales terms—conditions that SAMR claims Nvidia may have violated.
This high-stakes skirmish isn’t just about Nvidia; it’s a flashpoint in a broader struggle for technological supremacy. Nvidia’s future in China could hinge on how this investigation unfolds, as the world’s two largest economies dig in their heels for a prolonged tech cold war.
(Source: WSJ | Bloomberg)
