Nvidia Faces Antitrust Probe in China Amid Rising USA-China Tensions

Nvidia's stock dropped after Chinese regulators launched an antitrust investigation into the company’s 2020 purchase of Mellanox Technologies.

The State Administration for Market Regulation (SAMR) claims the deal may breach China’s competition laws, adding tension amid the ongoing U.S.-China tech dispute.

This investigation follows U.S. sanctions limiting Nvidia’s ability to sell advanced AI chips to China. In response, Nvidia released downgraded versions of its chips, but the geopolitical friction continues. China’s probe could be retaliation for U.S. policies targeting its tech sector, with similar restrictions placed on companies like Micron.

Nvidia also faces scrutiny from the U.S. Department of Justice and European regulators over potential anti-competitive behavior. While the company still dominates the AI chip market, competition from firms like Amazon is growing.

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The broader U.S.-China trade war, marked by tariffs and restrictions, has put Nvidia at the center of economic tensions. China may counter U.S. actions by leveraging its U.S. Treasury holdings or devaluing the yuan.

Additionally, China’s control over rare earth materials could disrupt global supply chains, intensifying the impact of these trade disputes.

Kostadin Dimitrov