Nvidia Faces Antitrust Scrutiny in China Amid US-China Trade Tensions
SINGAPORE – China has reported that an initial investigation has revealed Nvidia’s breach of its anti-monopoly laws, adding pressure on Washington during the recent US-China trade discussions which concluded on Monday.
The country’s antitrust regulator has pointed to this violation linked to Nvidia’s acquisition of the Israeli firm, which was finalized in 2020. However, the regulator hasn’t elaborated much on these preliminary findings or specified whether Nvidia will face penalties as the inquiry continues.
After the deal, Beijing had given the green light under the condition that Nvidia would ensure a steady supply of chips to China. Yet, since 2022, US authorities have prevented Nvidia and other American chipmakers from selling many advanced AI chips to Chinese companies.
Nvidia’s CEO has mentioned he’s in discussions regarding the possibility of supplying Blackwell chips to China.
This announcement came just hours before Treasury Secretary Scott Bescent indicated that a framework deal for TikTok was reached between US and Chinese negotiators after two days of talks, with both sides racing against a deadline to keep popular video-sharing apps operational in the US.
In morning trading, Nvidia’s stock dipped by about 1%. The company had no immediate comments on the situation.
Nvidia has, in many ways, become a major player caught in a web of trade disputes between the two largest economies. The company is known for producing some of the most powerful chips that are essential for the development of advanced AI technologies.
In December, China’s regulators began looking into Nvidia’s $7 billion acquisition of Mellanox Technologies. Only a week prior, the Biden administration intensified controls on exports concerning high-end chips to China.
An antitrust lawyer familiar with these developments noted that Nvidia is in a precarious situation. The company has had to halt sales of its more advanced chips to adhere to US export regulations, leaving it open to criticism from China. Allegations have arisen that Nvidia did not honor its 2020 commitment to provide China with an uninterrupted chip supply and treat its Chinese clients fairly.
In July, President Trump had permitted Nvidia to restart sales of H20 chips, which are particularly beneficial for AI. This chip was well-received in China before a sales block was imposed in April. Following Trump’s approval, concerns regarding potential cybersecurity threats led Beijing to halt purchases until the regulatory reviews were completed. Nvidia has maintained that its products do not include remote monitoring capabilities or other internal risks.
Both Nvidia and its Chinese clients are now hopeful that the Trump administration will provide clearance for a more advanced AI chip than the H20.
China, constrained by US limits on advanced chip-making technology, has struggled to manufacture chips that rival Nvidia’s top offerings on a large scale. Still, local companies are actively working to substitute US products with their own.
Feng Chucheng, co-founder of Beijing’s Hutong Research, remarked that China aims to demonstrate it isn’t conceding to obtain Nvidia’s goods, hinting that the antitrust issues show Nvidia isn’t a bargaining chip in US negotiations.
National champion Huawei is powering several AI data centers with its self-made chips. Other tech leaders like Alibaba and Baidu are also ramping up their use of domestically produced technology within their infrastructures.
Since Trump’s initial term, China has been investing significantly in its domestic chip industry, aspiring for long-term self-reliance. Simultaneously, Beijing aims to secure access to the latest technologies from the US and its allies to maintain competitiveness in high-tech sectors.
