China launches probe as chip warfare rumbles on | EUROtoday

China has launched an investigation into US laptop chip maker Nvidia, concentrating on considered one of America’s main tech corporations over alleged violations of anti-monopoly legal guidelines.

Shares within the firm dropped greater than 3% after the announcement, which marked the newest salvo in an ongoing US-China tech warfare over the profitable semi-conductor market.

Washington final week tightened restrictions on gross sales of sure exports to Chinese corporations and the conflict of exports is anticipated to proceed when Donald Trump re-enters the White House.

Nvidia didn’t instantly reply to a request for remark.

Founded in 1993, the agency was initially recognized for making the kind of laptop chips that course of graphics, notably for laptop video games.

The tech large now stands on the forefront of the event of chips that energy synthetic intelligence (AI), with a market worth of greater than $3tn.

But the corporate has additionally been caught in the course of rising geopolitical and financial tensions between the US and China, as the 2 international locations race to determine dominance over high-end chips.

Nvidia reported final month that clients primarily based in “China, including Hong Kong” had accounted for about 13% of gross sales thus far this yr.

But that’s down for the reason that US began ramping up restrictions of superior know-how to Chinese companies only a few years in the past, citing nationwide safety fears.

Chief govt Jensen Huang was tight-lipped earlier this yr when requested by enterprise analysts in regards to the political dangers for the agency within the months forward.

“We guide one quarter at a time,” he stated on a name to debate the corporate’s newest monetary replace.

“Whatever the new administration decides, we’ll, of course, support the administration. And that’s our – the highest mandate. And then after that, do the best we can.”

On Monday, Chinese state broadcaster CCTV stated that authorities in Beijing had launched a probe “in accordance with the law”.

It stated Nvidia had been accused of violating commitments made in 2020 when it acquired Mellanox Technologies, a smaller agency.

It comes after a contemporary crackdown by the US final week, which noticed restrictions on gross sales to 140 corporations together with Chinese chip companies resembling Piotech and SiCarrier with out particular permission.

At the time, China responded with new robust guidelines proscribing gross sales of key minerals to the US, together with antimony, gallium, and germanium. Analysts famous that the transfer was vital for singling out the US for such restrictions, as an alternative of instituting blanket limits.

Several commerce teams representing Chinese companies additionally spoke out, warning their members towards shopping for from US corporations.