China has initiated an antitrust investigation into Nvidia, the leading provider of processors for artificial intelligence, as reported by Chinese state media. This move is part of the ongoing competition between the United States and China for AI supremacy, which both countries consider vital for national security.
According to China Central Television, the Chinese government is concerned that Nvidia's acquisition of Mellanox, an Israeli networking company, may violate anti-monopoly laws in China. Although the specific details of the potential violation were not disclosed, the acquisition was approved by China in 2020.
Nvidia's shares experienced a slight drop in premarket trading following the news, despite the company's significant market performance this year. With a market value exceeding $3 trillion, Nvidia is second only to Apple in terms of market capitalization.
The recent escalation in the China-US chip war includes the Biden administration imposing additional restrictions on high-tech memory chip sales to China. These restrictions, aimed at slowing China's development of AI chips, are part of the US government's strategy to maintain a competitive edge in AI technology.
In response to the US restrictions, China's Commerce Ministry criticized them as a threat to global supply chain stability. China retaliated by banning the sale of materials essential for chip manufacturing, further intensifying the trade tensions between the two countries.
Both China and the United States are also focusing on enhancing their domestic chip production capabilities. The Biden administration's CHIPS Act aims to boost domestic chip manufacturing by investing billions of dollars in companies like Intel. Similarly, China announced a substantial semiconductor state investment fund worth $47.5 billion to strengthen its semiconductor industry.
Amidst these developments, Nvidia is facing antitrust scrutiny not only in China but also in the United States. The outcome of these investigations could have significant implications for Nvidia's role in the global AI landscape.
