China launches investigation into Nvidia’s acquisition of Israeli technology company

The report released Monday does not specify what exactly Chinese regulators are investigating about the $6.5 billion deal, which was first announced in 2019 and closed the following year.

“Due to Nvidia’s alleged violation of China’s anti-monopoly law and the state market regulator’s restrictive conditions related to Nvidia’s acquisition of Mellanox shares… in recent days, the state market regulator is launching an investigation against Nvidia in accordance with the law.”, said the statement from Chinese authorities, as translated by CNBC.

Shares of Nvidia lost $4.34, or 3.04%, to trade at $138.10 as of 10:50 a.m. EST on Monday.

The Chinese investigation is the latest salvo in a back-and-forth exchange between China and the United States over vital semiconductor chips seen as essential to establishing dominance in the growing field of artificial intelligence.

Last week, US President Joe Biden again tightened regulations for American companies that were already banned from exporting semiconductor technology to China.

Washington hopes the strict rules will slow Beijing’s advances in AI-related weapons and other defense systems.

Biden has repeatedly passed legislation restricting Chinese access to U.S. microchip technology, deeming it a national security issue.

NVIDIA was founded in 1993 and replaced Intel in the Dow Jones Industrial Average last month.

In October, NVIDIA briefly took over Apple’s top spot as the world’s most valuable company.