Nvidia has been slapped with an antitrust probe by China's state regulator, likely a response to US export restrictions as part of the ongoing chip wars between the two countries.
China's State Administration for Market Regulation (SAMR) announced an investigation into the GPU giant on Monday, citing alleged breaches of anti-monopoly regulations.
The focus of the investigation is not clear. According to Beijing approved newspaper China Daily, references were made to the company's $7 billion acquisition of datacenter networking specialist Mellanox.
This would make little sense on the face of it as the transaction happened four years ago in 2020, and was specifically approved at the time by the Chinese regulatory authorities, as The Register reported back then.
However, a proviso was raised at the time, stipulating that the two companies could not mandate bundling or attach any other "unreasonable trading conditions" when selling hardware in China.
We asked Nvidia if it could shed some light on the allegations.
Nvidia's share prices took a 2 percent hit briefly before rebounding. In the wake, CNBC translated a statement from the regulator: "In recent days, due to Nvidia's suspected violation of China's anti-monopoly law and the State Administration for Market Regulation's restrictive conditions around Nvidia's acquisition of Mellanox shares ... the State Administration for Market Regulation is opening a probe into Nvidia in accordance with law."
It seems likely that the action is in retaliation for the latest US restrictions aimed at curbing China's access to advanced technology, including new controls unveiled last week on high-bandwidth memory (HBM), which is used in Nvidia's GPUs and other AI accelerators, software tools for developing or producing semiconductors, and certain types of chip manufacturing equipment.
But the California-based biz has often found itself caught up in the so-called chip wars, with Washington clamping down on the type of GPUs it was able to sell to buyers in the Middle Kingdom, prompting the company to develop special models solely for the Chinese market. Nvidia was forecasting it would make $12 billion from selling GPUs into the country earlier this year, despite trade restrictions.
Beijing had already retaliated against the US by imposing a block on exports of key minerals such as gallium, germanium and antimony, many of which are critical materials for the semiconductor industry. ®