The world’s largest chipmaker, Nvidia, is facing a new challenge as Chinese authorities launch an antitrust investigation into the company. The probe comes amid a growing battle for AI dominance between the US and China, with both nations believing that winning this race is crucial for national security.
China Central Television reported on Monday that the government believes Nvidia’s purchase of Israeli networking company Mellanox could violate anti-monopoly laws. Although the acquisition was approved in 2020, the report did not specify what it did to break the law.
Nvidia shares fell less than 2% in premarket trading following the news. The company’s stock has surged nearly 200% this year due to increased demand for its chips, driven by the AI boom. Its market value is over $3 trillion, making it the second-largest chipmaker after Apple.
The investigation is part of a tit-for-tat battle between China and the US over high-tech memory chips and AI technology. The US has imposed new export controls on Chinese companies, restricting the sale of critical materials such as germanium and gallium. China responded by banning the sale of these materials, citing concerns about global supply chain stability.
The US has accused China of stealing American-made AI software, a claim Beijing denies. Nvidia is under antitrust scrutiny in the US, with Bloomberg reporting that it’s also facing investigation in the country.
Both countries are trying to boost their domestic chip production through various initiatives. The CHIPS Act in the US provides billions of dollars for companies like Intel to increase production at home. Meanwhile, China has announced a $47.5 billion semiconductor fund, supported by investments from six state-owned banks.
Source: https://edition.cnn.com/2024/12/09/tech/nvidia-china-investigation/index.html