China Launches Antitrust Probe Into U.S. Chipmaker Nvidia Amid Escalating Tech Tensions

China has initiated an antitrust investigation into U.S.-based chipmaker Nvidia, marking a significant escalation in the ongoing tech and trade tensions between Beijing and Washington.

The State Administration of Market Regulation (SAMR) announced on Monday that Nvidia had potentially violated Chinese antitrust laws and breached conditions tied to its 2020 acquisition of Israel-based Mellanox Technologies. The $6.9 billion deal was approved by China with stipulations, including commitments to supply GPU accelerators and Mellanox high-speed network devices to Chinese customers, avoid bundling Mellanox products with its own, and ensure interoperability with third-party network devices.

While SAMR has not disclosed which specific terms Nvidia is accused of breaching, the timing of the probe coincides with a broader trade and technology dispute between the two nations.

The investigation comes shortly after Beijing imposed stringent export controls on critical raw materials destined for the U.S., a retaliatory measure following Washington’s recent restrictions on semiconductor production equipment and software exports to China. Additionally, over 140 Chinese companies were added to the U.S. Entity List, further curbing trade.

China’s semiconductor industry groups have also advised local companies to be cautious when purchasing U.S. chips, citing security concerns. Despite these warnings, Nvidia’s chips remain critical to AI training in China. However, the company is now restricted to selling downgraded versions of its AI chips in the Chinese market due to U.S. export controls aimed at slowing China’s AI advancements.

China represents a significant market for Nvidia, accounting for approximately 15.4% of the company’s total revenue in the quarter ending October 27.

In response to the probe, Nvidia emphasized its commitment to regulatory compliance and customer satisfaction. “We work hard to provide the best products we can in every region and honor our commitments everywhere we do business. We are happy to answer any questions regulators may have about our business,” the company said in a statement.

Shares of Nvidia fell 2.55% on Monday following the announcement.

The investigation signals Beijing’s intent to leverage regulatory tools in its increasingly complex rivalry with the U.S., particularly in the critical semiconductor sector.