Title: American Tech Giant Nvidia Under Antitrust Probe in China Amid Ongoing Chip Row
In the latest development of the ongoing US-China chip dispute, American tech giant Nvidia finds itself in the crosshairs of an antitrust investigation launched by China. Nvidia, recognized globally as the top supplier of processors vital for artificial intelligence, is under scrutiny just weeks following the US’s implementation of a semiconductor export control package aimed at China.
The export controls package, which restricts exports to 140 firms, is the US’s most recent strategic move to stymie China’s chip production and access, especially those that could enhance the military application of artificial intelligence. Responding to this, China too braced itself and strengthened controls on key raw materials exports to the US, in addition to discouraging Chinese companies from purchasing American-made chips.
China’s State Administration for Market Regulation hinted at a potential breach of its anti-monopoly laws due to Nvidia’s acquisition of the Israeli networking firm, Mellanox. However, the specific details of the alleged violation were not disclosed in the Monday statement. This regulation was sanctioned by China in 2020.
While Nvidia hasn’t officially addressed China’s investigation announcement, the chipmaker’s shares did experience a 2.2% drop in pre-market trading on Wall Street.
Interestingly, this development comes on the heels of Nvidia’s decision to establish an artificial intelligence research and development center in Vietnam. Many industry observers interpret this strategic move as the American chipmaker’s attempt to lessen its dependence on China amidst the ongoing chip trade dispute.
The Biden administration’s recent export controls constitute the third round of similar restrictions targeting chip sales to China. The US Commerce Department argued that these restrictions would hamper China’s ability to develop AI chips, which could potentially give them a military edge. On the other hand, China’s Commerce Ministry voiced concerns about these restrictions posing a “significant threat” to the stability of global supply chains.
Nvidia has long been a crucial provider of high-performance GPUs and AI chips to Chinese firms. In the third quarter of 2024, approximately 12% of Nvidia’s revenue, or around US$3.7 billion, came from China, marking an impressive 30% increase from the previous year.
Despite Nvidia CEO Jenson Huang’s assurance of the company’s commitment to its operations in mainland China, the tech giant has shown signs of reducing its reliance on the Asian superpower. Aside from Vietnam, Nvidia has been expanding its partnerships and investments in Southeast Asian countries such as Thailand, Malaysia, Indonesia, and Singapore in recent years.
