Nvidia in the Crosshairs: China Investigates Amid U.S. Tech Tensions

China has launched an investigation into U.S. chipmaker Nvidia Corp for alleged anti-monopoly violations. This move follows recent U.S. restrictions on China's semiconductor industry. Nvidia, which previously dominated China's AI chip market, now faces increasing domestic competition. The investigation includes potential violations related to Nvidia's 2020 acquisition of Mellanox Technologies.

China announced on Monday that it is investigating Nvidia Corp for supposed breaches of the nation's anti-monopoly laws. This inquiry is seen as a counter before Washington's recent constraints on the Chinese chip market. The State Administration for Market Regulation (SAMR) did not specify how Nvidia, known for its AI and gaming chips, might have violated these laws.

The U.S. chipmaker is also suspected of breaking conditions set during its 2020 acquisition of the Israeli chip designer Mellanox Technologies, approved under strict terms by China's regulator. Nvidia's reaction was not immediate, but its shares saw a 2% decline.

This probe aligns with heightened Sino-U.S. tech tensions; last week's U.S. semiconductor crackdown includes export restrictions affecting 140 firms. Analyst Bob O'Donnell suggests that Nvidia may not be significantly impacted, as most of its high-end chips are already barred from Chinese markets. Meanwhile, in response, China has restrained exports of critical minerals to the U.S., emphasizing self-reliance in the domestic chip industry.

(With inputs from agencies.)