Nvidia shares were under pressure on Monday after a Chinese regulator announced it was investigating the chipmaker for possible antimonopoly violations. The State Administration for Market Regulation (SAMR) has opened an investigation into Nvidia, specifically concerning its acquisition of Mellanox, a company Nvidia bought to enhance its data center and networking capabilities. The Chinese government disclosed that the probe is in response to suspected violations of the country’s antimonopoly law.
This investigation comes amidst increasing tensions between the U.S. and China over technological dominance, especially in the semiconductor industry. Recently, the Biden administration announced a series of curbs on December 2, further restricting Nvidia and other key American semiconductor companies from selling their most advanced AI chips to China.
China probes Nvidia’s Mellanox acquisition
These restrictions aim to prevent China from strengthening its military through advanced technology. Nvidia’s shares slid approximately 3% following the announcement of the investigation. Despite this recent drop, the company’s stock has shown remarkable growth over the past year.
Nvidia shares have surged nearly 188% as investors continue to bet on the AI chip sector, driven chiefly by the increased interest and developments sparked by the advent of technologies like ChatGPT. The SAMR’s latest move adds another layer of complexity to Nvidia’s operations in China as the company navigates both U.S. regulations and Chinese scrutiny. Nvidia did not immediately respond to requests for comments on the ongoing investigation.
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