China launches investigation into US chipmaker Nvidia | Technology news

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

Chinese state media said on Monday that the California-based chipmaker is under investigation by the State Administration for Market Regulation for possible violations of Chinese antitrust laws.

Official media reports said that regulators would also review the company’s $6.9 billion acquisition of Mellanox Technologies, an Israeli-American company specializing in computer networking products, without providing further details.

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

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

However, the company’s dominance in AI chips has come under scrutiny by regulators, including in the United States.

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

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

Nvidia did not immediately respond to a request for comment.

The Chinese antitrust investigation 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 the Chinese chip industry.

The restrictions added an additional 140 Chinese companies to the ministry’s entity list of blacklisted companies.

In what has become a tit-for-tat of trade restrictions, Beijing last week banned exports of gallium, germanium and antimony – used to produce chips, solar panels and electric car batteries, among other technologies -. To the United States.

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

“The People’s Republic of China often targets and displays more symbolic companies or goods than is often the case,” Zhong told Al Jazeera, using the acronym for the People’s Republic of China.

“Nvidia is pretty much prohibited from selling in the PRC market anyway, so I’m not sure what the actual restrictions will do.”

Chung said the restrictions were reminiscent of Beijing’s previous ban on Australian wine and Japanese seafood, which was used to signal anger in Canberra and Tokyo.

In both cases, the ban did not include vital exports such as metals or electronics.

The United States also imports gallium and germanium from other countries, including Taiwan, Canada, South Korea, Japan and Belgium, according to supply chain consulting firm TECHCET, which said it would likely be difficult to replace just antimony.

Nvidia has worked around US export controls in the past by designing separate chips for China, where it still earns 15% of its revenue.

Reuters reported, citing unnamed sources familiar with the news, that the company has plans to enter into a partnership with the Chinese company Inspur to distribute a new artificial intelligence chip to China only in the second quarter of 2025.

Nvidia is not the only company targeted by Beijing in its trade war with Washington.

In October, the China Cybersecurity Association recommended a security audit of Intel’s products and accused the company of installing back-end monitoring features.

Last year, Chinese regulators banned US memory chip maker Micron’s products from key infrastructure after the company failed a security review.

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