Amid the chip war, China is investigating Nvidia for antitrust violations

China is signaling it may take action against Nvidia by launching an antitrust investigation into the GPU provider. On Monday, China’s state market regulator announced the investigation into allegations that Nvidia violated the country’s anti-monopoly laws.

Few details are available, but Chinese regulators will examine Nvidia’s years-long acquisition of Israeli-American company Mellanox, which developed networking products for supercomputers and data centers. In 2020, regulators worldwide, including in China, approved the acquisition. However, China’s state market regulator points out that Nvidia may have violated the terms of the contract.

In response, the company told PCMag: “Nvidia wins on performance, which is reflected in our benchmark results and customer value, and customers can choose which solution is best for them. We work hard to provide the best possible products in every region.” Honor our commitments wherever we do business. We are happy to answer any questions regulators may have about our business.”

Still, the investigation raises concerns that China is using the Nvidia investigation to hit back at the U.S. for blocking AI-related technology exports to the country. Last week, the Biden administration made another attempt to achieve this by banning 140 Chinese companies from receiving memory chips and advanced chip-making equipment. Two days later, Chinese chip industry groups said U.S.-made processors were unsafe for use and urged local companies to buy from domestic suppliers.

But chip industry analyst Patrick Moorhead says the antitrust investigation into Nvidia is largely about the company’s dominance in GPU sales for generative AI. “No surprises here,” he tweeted. “It takes five to 10 years to sort these things out. Faster in China, but still very slow. All regions will eventually explore Nvidia for data center GPUs.”

Back in August, it was revealed that the US Department of Justice was also scrutinizing the company’s business, although Nvidia denied receiving a federal subpoena. In France, local regulators also raided an Nvidia office last year, apparently in an attempt to determine the company’s dominance in the AI ​​chip boom.

Although the US has restricted GPU sales to China, Nvidia is still shipping “export complaint” products to the country. “Geographically, our data center revenue in China increased sequentially due to shipments of export-compliant Hopper products to industrial companies,” the company’s CFO reported last month. “We assume that the market in China will remain very competitive in the future.”

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About Michael Kan

Senior Reporter

I’ve been a journalist for over 15 years – I started as a schools and city reporter in Kansas City and joined PCMag in 2017.

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