China launches investigation into US chipmaker Nvidia

In what appears to be Beijing’s most recent retaliation against Washington’s sanctions against Chinese tech companies, China has launched an antitrust investigation into chip company Nvidia.

The California-based chipmaker’s state-based state-run newspaper reported on Monday that the state-based agency was looking into possible antimonopoly laws violations by the state administration for market regulation.

Regulators will also review the company’s $6.9bn acquisition of Mellanox Technologies, an Israeli-American supplier specialising in computer networking products, state media reports said, without providing further details.

In addition to the provision that Nvidia would not discriminate against Chinese suppliers, the deal was approved by Chinese regulators in 2020.

Nvidia, which designs advanced chips used to power artificial intelligence (AI), is one of the world’s most valuable companies, with a market capitalisation of more than $3.4 trillion.

The company’s dominance in the AI chips, however, has drawn scrutiny from regulators, including in the United States.

According to a source with knowledge of the situation, the US Department of Justice launched its own antitrust investigation into Nvidia earlier this year, according to The Information’s tech news outlet in August.

Shares of Nvidia closed 2.55 percent lower on Monday following the news of Beijing’s probe.

Nvidia did not respond to a comment request right away.

The US Department of Commerce announced its third round of export controls to prevent the Chinese chip industry from obtaining the most advanced technology, prompting China’s antimonopoly investigation.

The department’s blacklisted blacklist of Chinese companies had 140 more come to be on the department’s Entity List as a result of the restrictions.

In what has become a tit-for-tat exchange of trade restrictions, Beijing last week banned exports of gallium, germanium and antimony – which are used in the production of chips, solar panels and electric vehicle (EV) batteries, among other technologies – to the US.

Ian Chong, a Singapore-based political scientist focusing on security issues, said Beijing’s recent moves are more symbolic than damaging.

Chong, who uses the People’s Republic of China acronym, told Al Jazeera, “The PRC will frequently target symbolic goods or goods and make a bigger show of it than is frequently the case.”

I’m not sure what the actual restrictions will be because Nvidia is currently prohibited from selling in the PRC market.

Chong argued that Beijing’s earlier restrictions on Australian wine and Japanese seafood were a sign of anger at Canberra and Tokyo.

In both cases, the bans did not include critical exports like minerals or electronics.

Gallium and germanium are also imported by the US from other countries, including Taiwan, Canada, South Korea, Japan and Belgium, according to the supply chain consulting firm TECHCET, which has said that only antimony is likely to be difficult to substitute.

Nvidia has previously evaded US export restrictions by creating separate chips for China, where it still generates 15% of its revenue.

Unnamed individuals who are familiar with the news cited unnamed sources who cited the company’s plans to work with Chinese company Inspur to distribute a new AI chip made in China in the second quarter of 2025.

Beijing’s trade war with Washington includes Nvidia, too.

The Cybersecurity Association of China made the recommendation to conduct a security review of Intel products in October, accusing the company of using backdoor surveillance features.

After the US memory chip manufacturer Micron failed a security review, Chinese regulators banned its products from important infrastructure last year.

Source: Aljazeera