China has launched an investigation into US computer chip maker Nvidia, targeting one of America’s leading tech companies over alleged violations of anti-monopoly laws.
Shares in the company dropped more than 3% after the announcement, which marked the latest salvo in an ongoing US-China tech war over the lucrative semi-conductor market.
Washington last week tightened restrictions on sales of certain exports to Chinese companies and the clash of exports is expected to continue when Donald Trump re-enters the White House.
Nvidia did not immediately respond to a request for comment.
Founded in 1993, the firm was originally known for making the type of computer chips that process graphics, particularly for computer games.
The tech giant now stands at the forefront of the development of chips that power artificial intelligence (AI), with a market value of more than $3tn.
Its growing dominance of the industry has caught the attention of competition regulators in the US and abroad. Last month, the firm acknowledged it had been contacted by watchdogs around the world, including in the US, UK, European Union, South Korea and China.
The company has also been caught in the middle of rising geopolitical and economic tensions between the US and China, as the two countries race to establish dominance over high-end chips.
Nvidia reported last month that customers based in “China, including Hong Kong” had accounted for about 13% of sales so far this year.
But that is down since the US started ramping up restrictions of advanced technology to Chinese firms just a few years ago, citing national security fears.
Chief executive Jensen Huang was tight-lipped earlier this year when asked by business analysts about the political risks for the firm in the months ahead.
“We guide one quarter at a time,” he said on a call to discuss the company’s latest financial update.
“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 said that authorities in Beijing had launched a probe “in accordance with the law”.
It said Nvidia had been accused of violating commitments made in 2020 when it acquired Mellanox Technologies, a smaller firm.
It comes after a fresh crackdown by the US last week, which saw restrictions on sales to 140 companies including Chinese chip firms such as Piotech and SiCarrier without special permission.
At the time, China responded with new tough rules restricting sales of key minerals to the US, including antimony, gallium, and germanium. Analysts noted that the move was significant for singling out the US for such restrictions, instead of instituting blanket limits.
Several trade groups representing Chinese firms also spoke out, warning their members against buying from US companies.
This article was originally published at www.bbc.com
