Nvidia has expressed its willingness to address any questions regulators may have regarding the company’s operations.
On Dec. 9, China's State Administration for Market Regulation, controlled by the Chinese Communist Party, launched an investigation into Nvidia Corp over potential violations of the country’s anti-monopoly law.
The investigation reportedly centers on Nvidia’s acquisition of Mellanox Technologies, an Israeli–American chip company, which China approved four years ago with the stipulation that Nvidia would not discriminate against Chinese firms.
This probe comes amid heightened tensions following new U.S. export controls targeting advanced semiconductor technology, which banned sales to 140 additional Chinese entities. In response, Beijing prohibited the export of critical minerals used in semiconductor manufacturing to the U.S. Chinese industry groups also cautioned that American chips were “no longer safe” to purchase, encouraging businesses to strengthen ties with non-U.S. chipmakers and prioritize domestic chips.
While Nvidia remains the global leader in artificial intelligence (AI) chips, U.S. export bans have opened opportunities for Chinese competitors to gain traction in their home market. Huawei recently announced plans to mass-produce a high-performance AI chip by 2025 to challenge Nvidia’s dominance.
The U.S. export rules primarily restrict the sale of advanced chips to Chinese entities, but many manufacturers, including Nvidia, continue to supply older, less powerful chips to Chinese firms.
A spokesperson for Nvidia reiterated the company’s commitment to global standards and customer needs, stating, “Nvidia wins on merit, as reflected in our benchmark results and value to customers. We strive to provide the best products and honor our commitments in every market where we operate.”
Despite U.S. restrictions, China remains a significant market for Nvidia, which has developed specific chip models tailored for Chinese customers. Before the U.S. export controls in 2023, China accounted for 26% of Nvidia’s revenue in fiscal 2022. This share declined to 17% over the next two years due to the restrictions.
U.S. officials, including Commerce Secretary Gina Raimondo, have emphasized that the restrictions aim to prevent advancements in AI and other technologies critical to China's military, rather than economic competition. However, concerns persist about Chinese entities circumventing these restrictions to access prohibited technologies.
China has a history of leveraging anti-trust investigations to secure concessions from major corporations. For instance, Qualcomm paid a $975 million fine in 2015 following a 14-month anti-monopoly probe and agreed to reduce royalty rates for Chinese firms like Xiaomi and Huawei. Similarly, Chinese tech giants, including Tencent, Baidu, and Alibaba, have faced significant penalties under the same law.