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Nvidia shares slide after China launches investigation into possible antitrust violations

Nvidia shares slide after China launches investigation into possible antitrust violations

Jensen Huang, founder, president and CEO of Nvidia, speaks about the future of artificial intelligence and its impact on energy consumption and production at the Bipartisan Policy Center on September 27, 2024 in Washington, DC.

Chip Somodevilla | Getty Images

Nvidia Stocks were under pressure on Monday after a regulator in China said it was investigating the chipmaker for possible violations of the country’s antimonopoly law.

Shares fell about 2% premarket.

The state market regulator has opened an investigation against the chip maker in connection with the takeover of Mellanox, the Chinese government announced on Monday.

“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… the state market regulator is launching a lawful investigation against Nvidia in recent days,” said one obtained by CNBC translated statement.

Nvidia did not immediately respond to a request for comment.

The news comes as competition between the US and China for chip manufacturing capacity heats up after the Biden administration announced a final set of restrictions on semiconductor tool makers on December 2.

The U.S. has tightened restrictions on chip sales to China in recent years, blocking Nvidia and other major semiconductor makers from selling their most advanced AI chips to prevent China from bolstering its military. The company has been working to develop new products for sale in China that comply with U.S. regulations.

Shares of the AI ​​chip darling have outperformed this year, rising nearly 188% as investors increased their bets on the sector more than two years after ChatGPT’s debut. Stocks have also helped push the market to new highs, as has the broader technology sector.

—CNBC’s Evelyn Cheng contributed reporting.

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