Nvidia Faces Antitrust Probe Amid Chip Tensions

Nvidia, one of the world's leading chipmakers, faces an antitrust probe from Chinese authorities a decision that could impact the company's stock and its practices in the United States.

Chinese media announced on Monday that the antitrust-focused State Administration of Market Regulation had opened an investigation into Nvidia over allegations of antitrust violations, according to the Financial Times. The SAMR is also reviewing the company's commitments released during the 2020 acquisition of Israeli networking product provider Mellanox as part of the Nvidia antitrust probe. The Mellanox deal, the largest acquisition by the company to date, was only conditionally approved by China at the initial time of the deal. It's also a deal that analysts believe helped launch the company into its predominant place in the market.

In the last few years, Nvidia has consistently established dominance in the AI chip market, and its products have become integral tools for developing the strongest possible AI models.

According to Benzinga, the SAMR announcement about an Nvidia antitrust probe caused Nvidia's stock to drop slightly afterward.

Nvidia Antitrust Probe Isn't the First

The Nvidia antitrust probe in China was announced a week after the U.S. announced new export controls. The controls led to Beijing responding with its own embargo on critical materials to the U.S.

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The ongoing conflict between the U.S. and China over chips has led to Nvidia being forced to change its chips and weaken the processing power to sell copies in China.

This isn't the first time Nvidia has faced federal scrutiny over its practices. The U.S. Department of Justice has also been probing Nvidia over allegations of antitrust conduct, even getting a subpoena for several internal records. The probe is investigating claims that the company monopolizes data center GPUs and other prominent chip technologies.