Nvidia 'happy to answer questions' after Beijing starts antitrust probe

Staff reporter and Reuters

Nvidia said it is "happy to answer any questions" after China launched an antitrust probe into a recent acquisition by the US chipmaking giant.

A Nvidia spokesperson said the company worked hard to "provide the best products we can in every region and honor our commitments everywhere we do business," adding that "we are happy to answer any questions regulators may have about our business."

On Monday, China said it had launched an investigation into Nvidia over suspected violations of the country's anti-monopoly law. However, the State Administration for Market Regulation did not elaborate on how the US company, known for its artificial intelligence and gaming chips, might have violated such a law.

It said the US chipmaker was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal.

It is the latest salvo in a long-running trade war between China and the US as the countries vie for technological superiority.

Last week, four of China's top industry associations issued a rare response saying that Chinese companies should be wary of buying US chips as they were "no longer safe."

Nvidia's shares closed 2.5 percent lower, dragging down US markets and the tech sector. The three bluechip stock indexes fell, with the tech-savvy Nasdaq Composite losing 0.6 percent.

China's chipmakers Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor both dipped over 2 percent in Hong Kong yesterday.

Notably, China welcomes the presence of Nvidia and aims to build a better business environment for foreign firms, its vice commerce minister Wang Shouwen told Jay Puri, an executive of the US chipmaker, last month.

TECHnalysis Research chief analyst Bob O'Donnell said that the probe is unlikely to have much of an impact in the near term, because most of Nvidia's advanced chips are already restricted from being sold to China.

The investigation comes after the US launched its third crackdown in three years on China's semiconductor industry, which saw Washington curb exports to 140 companies.

Subsequently, Beijing banned exports to the US of the critical minerals gallium, germanium and antimony.

Nvidia is one of many companies caught up in US-China friction. US sanctions in 2022 banned shipments of A100 and H100 AI chips to China, leading Nvidia to develop modified versions. These China-specific variants were further restricted in October 2023, prompting Nvidia to release another set of modified chips.

"It's clear that the Chinese government is trying to react against recent restrictions from the US, but their ability to impact the US semiconductor industry continues to decrease over time," O'Donnell said.