China Investigates Nvidia Amid U.S. Chip Sanctions

China has initiated an investigation into Nvidia Corp over alleged anti-monopoly violations relating to its acquisition of Mellanox Technologies. This move is perceived as a response to U.S. restrictions on chip exports. Nvidia had a dominant presence in China's AI chip market but now faces increasing local competition.

China announced on Monday the commencement of an investigation into Nvidia Corp for potential violations of the country's anti-monopoly laws. This investigation may be seen as a direct response to ongoing chip-related tensions between China and the United States.

The State Administration for Market Regulation highlighted concerns over Nvidia's compliance with commitments it made when acquiring Mellanox Technologies in 2020. The announcement caused Nvidia's shares to drop by 2.2% in premarket trading.

This investigation follows recent U.S. actions restricting chip exports to numerous Chinese companies. Nvidia, though leading in China's AI chip market, now faces stiff competition from local businesses like Huawei, partly due to recent geopolitical trade conflicts.

(With inputs from agencies.)