China launches investigation into American chipmaker Nvidia | Technology News

Taipei, Taiwan – China has launched an antitrust investigation into chip giant Nvidia in what appears to be Beijing’s latest retaliation against Washington’s sanctions on Chinese technology companies.

Chinese media said on Monday that the California-based manufacturer was being investigated by the State Administration for Market Regulation for violating China’s antimonopoly laws.

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

Chinese regulators approved the deal in 2020 with several restrictive conditions, including a stipulation that Nvidia would not discriminate against Chinese suppliers.

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

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

Earlier this year, the US Department of Justice launched its own antitrust investigation into Nvidia, tech news agency The Information reported in August, citing people familiar with the matter.

Nvidia shares closed up 2.55 percent on Monday following news of the Beijing investigation.

Nvidia did not immediately respond to a request for comment.

China’s antimonopoly probe comes a week after the US Commerce Department announced its third round of export controls aimed at keeping advanced technology out of the hands of China’s chip industry.

The restrictions added another 140 Chinese companies to the list of companies included in the list of banned firms.

In what has become an exchange of trade restrictions, Beijing last week banned the export of gallium, germanium and antimony – 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 who specializes in security issues, said Beijing’s latest move is more symbolic than damaging.

“The PRC will often target symbolic companies or goods and make a bigger show than usual,” Chong told Al Jazeera, using the acronym for the People’s Republic of China.

“Nvidia is heavily restricted from selling in the PRC market, so I’m not sure what the actual restrictions will be.”

Chong said the restrictions were reminiscent of Beijing’s previous bans on Australian wine and Japanese seafood, which were used to show anger in Canberra and Tokyo.

In both cases, the ban did not cover essential exports such as 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 consultancy TECHCET, which said only antimony would be difficult to replace.

Nvidia has worked to control US exports in the past by designing different chips in China, where it still earns 15 percent of its revenue.

The company has plans to partner with Chinese company Inspur to distribute a new AI chip in China only in the second half of 2025, Reuters news agency reported, citing unnamed sources familiar with the news.

Nvidia isn’t the only company Beijing has targeted in its trade war with Washington.

In October, the Cybersecurity Association of China recommended a security review of Intel products and accused the company of installing background surveillance features.

Last year, Chinese regulators banned products from US memory chipmaker Micron from critical infrastructure after the company failed a security review.

Both investigations followed investigations by the US and other countries into Chinese technology companies Huawei and ZTE.