Nvidia facing Chinese anti-monopoly probe as business practices come under scrutiny

1 week ago 3

Nvidia’s acquisition of Mellanox Technologies is being investigated by China
The second-biggest company in the world will cooperate with regulators
China’s probe comes just days after the US intensifies restrictions

The recent run of high-profile antitrust investigations could be set to intensify even further with the launch of a Chinese-backed anti-monopoly investigation into Nvidia.

The country's probe focuses on alleged violations linked to Nvidia's near-$7 billion acquisition of networking company Mellanox Technologies in 2020.

While tech giants across the globe are all facing regulatory scrutiny, the timing of the investigation handily lines up with tightened US restrictions on China's access to advanced semiconductors, marking the escalation of the ongoing US-China tech war.

China launches its own Nvidia investigation

The news was announced by Chinese state broadcaster CCTV, with Beijing’s State Administration for Market Regulation saying the chipmaker failed to provide new product information to rivals within 90 days of availability to Nvidia, something it was required to do as part of the deal.

The probe comes not long after the US added even more Chinese companies to its entities list. In response, the country has curbed some mineral exports, including antimony, gallium and germanium, which are all used in the production of advanced semiconductors in the US.

Center for Strategic and International Studies researcher James Lewis said (via BBC): “The timing is not a coincidence… It's mainly a message to the US government - the Chinese have decided they're not just going to take sanction after sanction.”

Nvidia has already confirmed it would be “happy to answer any questions regulators may have about our business.”

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A company spokesperson added: “Nvidia wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them… We work hard to provide the best products we can in every region and honor our commitments everywhere we do business.”

After becoming the world's most valuable company on two separate occasions, Nvidia has slipped back into second place, with a market cap of $3.399 trillion, second only to Apple.

The company’s early entry to the AI chips market has allowed it to benefit from off-the-scale interest in the technology, with Nvidia shares rising from $16.27 prior to ChatGPT’s public preview launch to $138.81 now, marking a colossal 753% increase.