Beijing has launched an anti-trust investigation against Nvidia, marking another installment in its escalating technology conflict with Washington. The timing of the decision announcement – coinciding with trade talks – suggests that the chip dispute is becoming a key pressure point in the two powers’ relationship.
China’s State Administration for Market Regulation (SAMR) has announced that it has launched a preliminary investigation into Nvidia’s business practices. While the official announcement was very succinct, the move was seen as a strategic response to US export restrictions that have cut off Chinese companies from cutting-edge AI processors.
Representatives of the US administration have described this step as being taken at the “wrong time”, which only underlines its importance in the ongoing negotiations.
The actions of the Chinese office are not coincidental. It is part of a broader strategy in which Beijing is responding to US tariffs and the placement of more Chinese companies on trade blacklists.
Similar antitrust investigations have affected other US giants in the past, signalling a willingness to use regulatory tools as a form of retaliation.
Analysts point out that the formal pretext for the proceedings is most likely Nvidia’s acquisition of Israeli company Mellanox Technologies five years ago. China approved the deal on the condition that the GPU manufacturer would continue to supply advanced technology to the Chinese market.
Currently, due to US restrictions, Nvidia cannot sell its most powerful integrated solutions (combining GPUs with Mellanox networking technology), which Beijing may interpret as a violation of previous commitments.
The situation puts Nvidia in an extremely difficult position. On the one hand, China accounted for 13% of the company’s total sales last year, and demand for AI chips from local tech giants remains huge.
On the other hand, the company has to manoeuvre between increasingly stringent US export regulations and growing pressure from Beijing. Attempts to circumvent the restrictions, such as the creation of a special H20 chip for the Chinese market, face further obstacles – from security concerns on the Chinese side to unclear payment rules imposed by Washington.
Potential consequences of the investigation could include financial penalties of up to 10% of Nvidia’s annual revenue. However, analysts point out that more severe than the potential penalties are China’s long-term strategic goals of pursuing technological self-sufficiency and promoting domestic alternatives.
The antitrust investigation is therefore first and foremost a wake-up call and a powerful tool of pressure, demonstrating that further tightening of course by the US will have direct, painful consequences for US corporations.
