Comes just days after Biden administration unveiled new export controls targeting Chinese companies
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US and China continue to trade blows over chip tech
China has launched an anti-monopoly investigation into Nvidia, the leading US chipmaker, intensifying the tech war between the two global superpowers.
China’s State Administration for Market Regulation (SAMR) announced on Monday that it is investigating the company’s 2020 acquisition of Israeli firm Mellanox Technologies. Mellanox is a leading supplier of computer networking equipment, and its acquisition, valued at $6.9 billion, was conditionally approved by Chinese regulators in 2020.
The probe comes just days after the outgoing Biden administration unveiled new export controls requiring special permissions for sales to 140 Chinese companies, including chip firms Piotech and SiCarrier. These measures aim to limit China’s ability to develop advanced weapons and AI technologies.
China’s Ministry of Commerce responded with sharp criticism, accusing the US of “unilateral bullying” and hypocrisy.
“The US says one thing and does another, constantly broadening the concept of national security, abusing export control measures, and implementing unilateral bullying,” the ministry stated, according to a Google-translated statement.
“China firmly opposes this”.
In response to US sanctions, China introduced restrictions on the export of critical minerals, including antimony, gallium, and germanium, essential for semiconductor manufacturing.
Notably, the new rules specifically target the US, marking a departure from Beijing’s previous practice of applying blanket restrictions.
Nvidia has enjoyed an extraordinary rise in 2024, with its stock price nearly tripling amid skyrocketing demand for its graphics processing units (GPUs).
These chips are pivotal for AI applications, driving the company to become one of the most valuable firms globally. Its success has significantly buoyed the US stock market, underscoring its strategic importance to the American tech sector.
The company has been working to develop new products that comply with US export restrictions while still catering to the Chinese market.
In response to the investigation, Nvidia expressed its willingness to cooperate with Chinese authorities. The company said it is committed to fair competition and is focusing on providing innovative solutions to customers.
“Nvidia wins on merit, as reflected in our benchmark results and value to customers,” the company said.
“We work hard to provide the best products we can in every region and honour our commitments everywhere we do business.”
Nvidia’s stock dropped roughly 3% in early trading on Monday following news of the investigation.
The timing of China’s investigation adds a layer of complexity to the already tense US-China relationship.
President-elect Donald Trump has vowed to impose stiff tariffs on Chinese imports upon taking office. His recent appointments, including former Senator David Perdue as ambassador to China and economist Peter Navarro as trade and manufacturing advisor, signal a hardline approach to trade with Beijing.
Perdue has been labelled “anti-China” by Chinese think tanks, and Navarro is a vocal advocate for tariffs.
James Lewis, a researcher at the Washington-based Center for Strategic and International Studies, described China’s investigation into Nvidia as a form of “retaliation.”
“The timing is not a coincidence,” he said. “It’s mainly a message to the US government – the Chinese have decided they’re not just going to take sanction after sanction.”
The Chinese investigation is not the only regulatory challenge Nvidia faces. Both the US and France have launched separate probes into the company’s market practices.
While China’s inquiry focuses on anti-monopoly concerns, other regulators have expressed worries over Nvidia’s dominance in AI and semiconductor markets.