Just two weeks after Nvidia (NVDA) CEO Jensen Huang praised China’s contribution to artificial intelligence research in Hong Kong, the Chinese government launched an antitrust investigation into the Santa Clara, California-based company amid rising geopolitical tensions between the United States and China , and the uncertainty surrounding the global economy.
According to Chinese media reports today (December 9), China’s State Administration for Market Regulation is investigating Nvidia’s 2020 acquisition of Israeli computer network equipment company Mellanox. According to Bloomberg, China approved Nvidia’s $6.9 billion acquisition of Mellanox on the condition that the Israeli company must provide new product samples to competitors within 90 days of supplying Nvidia with new products. The transaction also received merger control approvals from U.S., Israeli, Mexican and EU authorities.
Nvidia said in a statement to the Observer that it would be happy to answer any questions regulators have about its business. “Nvidia wins on merit, and this is reflected in our benchmark results and value to customers, who can choose the solution that works best for them,” the chipmaker said. “We strive to deliver the best products in every region , and deliver on our commitments wherever we do business.”
The investigation is the latest blow in the escalating semiconductor war between China and the United States, which China’s Commerce Ministry has called “abusive control measures” and “a typical act of economic coercion.”
Earlier this month, the Biden administration imposed another round of chip export controls in China, following previous efforts to limit China’s access to advanced artificial intelligence chips. The country retaliated by banning exports of gallium, germanium, antimony and other superhard materials to the United States.
Previous measures taken by the United States restrict Nvidia from selling advanced GPUs to China starting in 2022.
Nvidia shares fall on antitrust probe
Affected by this news, Nvidia’s stock price fell more than 3% today. The past year has been a lucrative one for the chipmaker, with its shares soaring nearly 200% and its market capitalization reaching $3.38 trillion, making it the world’s second-largest company by market capitalization after Apple (AAPL) and Increased the wealth of its founders and founders.
Surge in demand for GPUs that power AI applications has propelled Nvidia to become the industry leader in AI chips, with a market share of 70% to 95%, according to Mizuho Securities. The chipmaker’s revenue rose 94% annually last quarter to $35 billion, with tech giants including Meta (META), Microsoft (MSFT), Google (GOOGL) and Amazon (AMZN) among its top chipmaker customers. .
In China, however, Nvidia lost market share due to strict export controls. The company’s sales in the country accounted for 15% of total sales in the quarter ended in September, down from 26% in the same period last year.
Huang himself also urged China and the United States to establish a positive relationship in technological advancement and praised China’s contribution to artificial intelligence research. “Open research is one of the wonders of modern science and perhaps the ultimate form of global collaboration – one we must protect,” the CEO said last month when he accepted an honorary doctorate from the Hong Kong University of Science and Technology.
