Nvidia is under scrutiny from the Chinese government over its $7 billion acquisition of Mellanox, a networking technology company. The probe aims to determine if the company is treating Chinese businesses fairly. This development comes as the US has restricted Nvidia’s sales of powerful chips to China due to national security concerns.
China’s investigation may be part of a broader trade dispute between the US and China, potentially leading to two separate chip industries. Despite this, Nvidia generates significant revenue from China, albeit with a declining share in its overall revenue.
The situation could have far-reaching implications for the global tech industry, creating complexities for multinational corporations and potentially bifurcating the chip industry. Experts believe that China’s actions may be driven by strategic interests rather than genuine antitrust concerns.
In 2022, the US banned Nvidia’s chips from being sold in China, prompting the company to develop less powerful chips for the market. Now, China is firing back with its own probe. Despite this, Nvidia still generates revenue through sales of less advanced chips in China.
The country’s share of Nvidia’s overall revenue has been declining, but experts believe the company can withstand these losses. A split chip industry could create challenges for multinational corporations like Apple, adding complexities to their supply chains.
As tensions between the US and China escalate, the situation highlights the risks associated with trade disputes and the importance of fair competition practices in global markets.
Source: https://finance.yahoo.com/news/nvidia-is-the-latest-chess-piece-in-the-us-china-tech-war-174555784.html