Nvidia’s shares dropped around 2% on Monday following news that China’s antimonopoly regulator is investigating the company for potential violations of the country’s competition laws.
This investigation adds to the ongoing scrutiny of foreign companies in China.
The State Administration for Market Regulation of China has launched an investigation into Nvidia concerning its acquisition of Mellanox Technologies, according to CNBC.
The Chinese government announced the investigation on Monday, focusing on potential antimonopoly issues related to the deal.
“In recent days, due to Nvidia’s suspected violation of China’s anti-monopoly law and the State Administration for Market Regulation’s restrictive conditions around Nvidia’s acquisition of Mellanox shares … the State Administration for Market Regulation is opening a probe into Nvidia in accordance with law,” according to the statement.
Nvidia has yet to comment on the investigation.
This development comes amid increasing tensions between the U.S. and China over semiconductor technology, with the Biden administration recently imposing new restrictions on semiconductor toolmakers, escalating the competition between the two countries in the chipmaking sector.
The U.S. has increasingly restricted chip sales to China in recent years, blocking Nvidia and other major semiconductor companies from selling their most advanced AI chips. These actions aim to prevent China from using such technologies to strengthen its military.
Shares of Nvidia, the AI chip leader, have surged nearly 188% this year as investors increase their bets on the sector, more than two years after the debut of ChatGPT.
