Nvidia stock faces fresh China concerns

Nvidia shares were active in early Tuesday trading after reports said China launched an antitrust probe into the AI-chip maker, as Beijing hits back at President Donald Trump's addition of a 10% levy on China-made goods as part of his focus on tariffs and trade deficits.

The Santa Clara, Calif., group (NVDA) has found itself at the apex of trade disputes between Washington and Beijing over the past three years. Officials from President Joe Biden's administration blocked or restricted some of its high-tech exports, and officials in China accused it of breaching antitrust rules.

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Last month in fact China's State Administration for Market Regulation launched an investigation into Nvidia regarding allegations it had breached anti-monopoly laws with its $6.9 billion purchase of Mellanox Technologies in early 2020.

Now, with Trump imposing the extra levy on China imports, Beijing officials are responding not only with fresh tariffs on U.S.-made goods but stepped-up probes into two of the world's biggest tech companies.

Nvidia revenue from China has declined as a percentage of its total, but sales from the world's second-largest economy still account for around 15% of its top line.
NurPhoto/Getty Images

China probes Nvidia and Google

London's Financial Times reported that regulators are looking to revive their December probe into Nvidia, while the State Administration for Market Regulation said it would reopen its 2019 investigation into Google parent Alphabet (GOOGL) . It declined to provide further details.

Nvidia generated around $5.4 billion in China-based revenue for its fiscal third quarter ended in October, with another $5.15 billion coming from clients and customers in Taiwan. Collectively, the two accounted for some 30% of the group's overall tally of $35.1 billion.

"We expect the market in China to remain very competitive going forward. We will continue to comply with export controls while serving our customers," finance chief Colette Kress told investors in November.

"Our AI initiatives continue to gather momentum as countries embrace Nvidia accelerated computing for a new industrial revolution powered by AI."

Nvidia CEO Jensen Huang had what Trump called a "good meeting" in the White House last week. The meeting followed reports that China-based DeepSeek had used high-end Nvidia chips to build an AI agent that upset markets and challenged the cost assumptions of cloud-computing-service providers such as Google, Amazon (AMZN) , Meta Platforms (META) and Microsoft (MSFT) .

"Inference requires significant numbers of Nvidia GPUs and high-performance networking," Nvidia said in a statement. "DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely available models and compute that is fully export control compliant."

There were no indications of fresh export restrictions following the meeting, with Nvidia saying only that Huang and the president "discussed the importance of strengthening U.S. technology and AI leadership."

Nvidia shares were last marked 2.6% higher in early Tuesday trading, compared with a 1.23% gain for the Nasdaq benchmark, and were changing hands at $119.63.

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