China’s antitrust authority has opened an investigation against US semiconductor giant NVIDIA for “alleged monopolistic practices.” Nvidia semiconductors are in high demand for artificial intelligence applications. So much so that they have pushed the group’s market capitalization above $3 trillion. The company is suspected by Chinese authorities of violating China’s anti-monopoly law . As well as the Authority’s review decision on its acquisition of Mellanox Technologies, an Israeli chip designer.
The disputes concern the agreement reached in 2020 when Beijing gave Nvidia conditional approval for its $6.9 billion acquisition of Mellanox Technologies. The move is an apparent response to Washington’s newly tightened restrictions on microchip exports against Beijing. In addition to the ban or increased controls decided a week ago by China on shipments of essential raw materials to the United States, which are the basis of chip production and military applications, therefore characterized by ‘dual use’, civil and military.
China still relies heavily on Nvidia’s chips for AI development, but the California-based company can only sell downgraded versions of its AI products because of Washington’s export controls aimed at curbing China’s progress in the field. China has accounted for 17% of Nvidia’s total revenue so far, up from 26% two years ago. In China alone, Nvida has a whopping 90% share of AI chips.
The last time China launched an anti-monopoly investigation into a major foreign technology company was in 2013 . When it investigated Qualcomm for overcharging and abusing its market position in wireless communications standards. Qualcomm agreed to pay a $975 million fine. At the time the largest fine China had ever levied on a company.https://youtu.be/-q-Czo-LZMM?si=2Y7-7jGerXjWMPjq