China Launches Antitrust Investigation into Nvidia Amid Growing US-China Chip Tensions

China has initiated an antitrust investigation into Nvidia, the leading U.S. chipmaker known for its AI and gaming processors. The probe, announced by China's State Administration for Market Regulation on Monday, is reportedly a response to recent U.S. sanctions on China's semiconductor sector. While details of Nvidia's alleged violations remain unclear, the investigation also includes potential breaches related to Nvidia’s 2020 acquisition of Israeli chip designer Mellanox Technologies.

The probe escalates the ongoing trade war between China and the United States, particularly in the tech sector. Last week, Chinese industry groups urged domestic companies to avoid U.S. chips, warning that they are "no longer safe" and advocating for local alternatives.

The NVIDIA logo displayed at its corporate headquarters in Santa Clara, California

Nvidia, which saw a 2.5% drop in its stock price following the announcement, stated it was committed to complying with all regulatory requirements. Industry analysts, however, believe the investigation’s immediate impact on Nvidia will be limited, as the company’s most advanced chips are already restricted in China due to U.S. export controls.

This move follows the U.S. government’s latest crackdown on China's semiconductor industry, which expanded export restrictions on 140 companies. In retaliation, China imposed its own export bans on key minerals like gallium and germanium. Despite these tensions, Nvidia continues to dominate the Chinese AI chip market, although it now faces growing competition from local companies like Huawei.

The investigation also revisits terms set during Nvidia's acquisition of Mellanox, which was approved by China with conditions requiring fair access to GPU accelerators. This is the first high-profile antitrust probe into a foreign tech firm since China investigated Qualcomm in 2013 over alleged market abuse.