China launches Nvidia probe amid rumblings of chip war
China has launched an investigation into US computer chip maker Nvidia, targeting one of America’s leading technology companies over alleged violations of anti-monopoly laws.
The company’s shares fell more than 3% after the announcement, the latest attack in the ongoing US-China tech war over the lucrative semi-conductor market.
Washington last week tightened restrictions on the sale of some exports to Chinese companies and the clash over the industry is expected to continue if Donald Trump re-enters the White House.
Nvidia did not immediately respond to a request for comment.
Founded in 1993, the firm was originally known for making computer chips that process graphics, especially for computer games.
The tech giant is now at the forefront of the development of chips that power artificial intelligence (AI). With a market cap of over $3tn.
Its growing dominance in the industry has attracted the attention of competition regulators in the US and abroad. Last month, the company acknowledged that it had been contacted by watchdogs from around the world, including the US, UK, EU, South Korea and China.
The company is also caught in the midst of rising geopolitical and economic tensions between the US and China as the two countries race to dominate high-end chips.
Nvidia reported last month that customers based in “China, including Hong Kong” had accounted for about 13% of sales so far this year.
But this has declined since the US began imposing restrictions on advanced technology for Chinese companies just a few years ago, citing national security fears.
Earlier this year, Chief Executive Jensen Huang remained silent when business analysts asked him about political risks to the company in the coming months.
“We guide one quarter at a time,” he said on a call to discuss the company’s latest financial update.
“Whatever the new administration decides, we will certainly support the administration. And that is our highest mandate. And then after that, we will do whatever we can.”
On Monday, Chinese state broadcaster CCTV said authorities in Beijing had launched an investigation “in accordance with the law.”
It said Nvidia was accused of violating commitments made in 2020 when it acquired Mellanox Technologies, a smaller firm.
This comes after the latest action taken by the US last week, which banned the sale of 140 companies, including Chinese chip companies such as Piotech and SeaCarrier, without special permission.
At the time, China responded with tough new rules restricting sales of key minerals including antimony, gallium and germanium to the US. Analysts said the move was important to isolate the US for such restrictions, rather than establish broader limits.
Several trade groups representing Chinese companies also spoke out, warning their members against purchasing from American companies.
