Recently, Chinese media reported that China has initiated an antitrust investigation into Nvidia. This step is part of a larger trade conflict with the US. The investigation seems to be a direct reaction to new US restrictions on high-tech exports to China. On December 2, the Biden administration restricted the export of 24 chip-making tools and three software tools to China.
These US sanctions aim to hinder China’s ability to develop advanced artificial intelligence hardware that competes with American technology. US Secretary of Commerce Gina Raimondo stated that this move aligns with the Biden administration’s strategy to limit China’s capacity to produce advanced technologies that could threaten US national security. Alan Estevez, from the Bureau of Industry and Security, emphasized that the US continually collaborates with allies to adjust these controls, with the latest announcement marking an important step in that effort.
According to Moody’s, these new measures not only target China’s military modernization but also aim to prevent any circumvention of export restrictions by extending controls beyond US-made chipmaking equipment. In response, China’s State Administration for Market Regulation is examining Nvidia’s $6.9 billion acquisition of Mellanox, a company crucial to the infrastructure of over 250 of the world’s top supercomputers.
Nvidia’s CEO, Jensen Huang, framed this acquisition as a necessary response to the growing demand for AI technologies. The Chinese regulator is now scrutinizing whether this deal could stifle competition in the sector.
Last year, China also imposed export restrictions on key materials like gallium and germanium, citing national security concerns. Moody’s pointed out that China has tightened these restrictions even further, including a ban on gallium, germanium, and antimony exports to the US, along with increased checks on graphite exports.
Nigel Green, head of financial advisory firm deVere Group, characterized the antitrust probe into Nvidia as highly significant. He views it as part of a broader strategy by China to challenge America’s dominance in the semiconductor industry. Green highlighted that this investigation follows the Biden administration’s recent export control measures on advanced chips.
He viewed China’s investigation as a deliberate geopolitical strategy, indicating that China will push back against US pressures. He warned that Nvidia’s situation might signal more aggressive actions from China in the future.
The US is expected to continue expanding sanctions to prevent China from advancing in AI technology. US National Security Advisor Jake Sullivan recently mentioned the country’s commitment to protecting its technology from potential adversaries, promising ongoing collaboration with allies to ensure that US technologies remain secure.