China’s competition regulator has announced that US chip giant Nvidia (NVDA.O) has violated the country’s anti-monopoly laws. A preliminary investigation by the State Administration for Market Regulation (SAMR) alleges that Nvidia has failed to fulfill its commitments, particularly regarding Mellanox Technologies, which it acquired in 2020.
China launched a official investigation into Nvidia in December.
This move is being interpreted as retaliation against Washington’s restrictions on China’s semiconductor industry.Heavy fines are on the horizon: According to China’s antitrust laws, companies can face fines of 1% to 10% of their annual revenue. Nvidia’s revenue from China last year was $17 billion.
Following the news, Nvidia shares fell by 2%. The announcement also came during the US-China trade talks in Madrid. Chips, especially Nvidia products designed for artificial intelligence, are among the most critical topics on the table during the talks.
While China aims to reduce its dependence on US chips, companies like Tencent and ByteDance have been asked to explain why they purchased Nvidia’s H20 chips. Information has also been requested from Nvidia regarding whether these chips pose any hidden security risks.
According to experts, the technological superiority war between the US and China is intensifying, and Nvidia is at the very center of this competition.
