The Chinese government has launched an investigation into NVIDIA, a global leader in artificial intelligence (AI) semiconductors. According to reports from the state-run Xinhua News Agency and China Central Television (CCTV) on the 9th, China’s State Administration for Market Regulation announced that it had initiated an investigation into NVIDIA on allegations of violating antitrust laws.
Reports indicate that NVIDIA is accused of violating the announcement No. 16, which imposed conditional approval by the Administration during the acquisition process of Israeli semiconductor company Mellanox in 2020. NVIDIA acquired Mellanox for $6.9 billion to strengthen its data center business. At the time, the Chinese government approved the acquisition on the condition that Mellanox provide information to competitors within 90 days after offering new products to NVIDIA.
NVIDIA is subjected to the strong export restrictions by the U.S. government, which is intensifying technology sanctions against China. Unable to sell advanced AI accelerators like the H100 in the Chinese market, NVIDIA is instead supplying lower-performance products (H20). The U.S. government is also considering measures to regulate low-spec chips to fill the gaps in semiconductor export controls to China.
Bloomberg News commented that as a leader in AI chips, NVIDIA finds itself caught in the “crossfire” between U.S. and China tech supremacy conflicts. The Financial Times reported that this investigation followed the U.S. government’s additional export controls on advanced semiconductors, including high-bandwidth memory (HBM) and semiconductor manufacturing equipment, and China’s export control on key materials like gallium to the U.S.
NVIDIA is also facing several antitrust investigations apart from the Chinese authorities. Reuters previously reported that the European Union (EU) antitrust authorities have started investigating the potential unfair sales practices of NVIDIA. The EU is focusing on whether NVIDIA partook in ‘bundling’ by selling its graphics processing units (GPUs) along with networking devices, along with the conditions for selling GPUs within the EU.
Moreover, according to Bloomberg, French regulatory authorities have also placed NVIDIA under an AI semiconductor investigation. Benoit Coeure, France’s antitrust regulator, warned of the possibility that NVIDIA could be accused of future antitrust actions. It is also reported that the U.S. Department of Justice is examining NVIDIA on allegations of antitrust law violations based on complaints from competitors such as AMD.