China hits again at US, initiates antitrust investigation in NVIDIA’s AI chip dominance – Firstpost

China has launched an antitrust investigation into NVIDIA, the American semiconductor large dominating the AI GPU market, in what seems to be a direct retaliation in opposition to the USA’ escalating chip export restrictions.  

The probe, led by China’s State Administration for Market Regulation (SAMR), scrutinises NVIDIA’s $6.9 billion acquisition of Mellanox Applied sciences in 2019, authorised by Beijing in 2020 below strict circumstances to make sure non-discriminatory entry to merchandise for the Chinese language market.

This transfer indicators a calculated response by China to counter US strain within the intensifying tech rivalry, concentrating on an organization central to developments in AI and computing.

Geopolitical Tensions Escalate

The antitrust investigation comes days after Chinese language state-backed business associations urged native firms to restrict purchases of US-made chips, citing issues over reliability and safety. The newest restrictions from Washington had already barred NVIDIA from exporting its superior A100 and H100 GPUs to China, forcing the corporate to develop modified variations, the A800 and H800, to adjust to US guidelines.

Nigel Inexperienced, CEO of deVere Group, views the investigation as a part of a broader geopolitical technique by Beijing, highlighting its intent to retaliate in opposition to perceived US provocations. China is utilizing regulatory scrutiny not solely to push again but in addition to problem NVIDIA’s stronghold in a market crucial for AI growth.

Affect on NVIDIA’s Enterprise

NVIDIA’s operations in China are important, with the area contributing $5.41 billion in income for the quarter ending October 29, 2024 — about 17.9 per cent of its international complete. The antitrust probe may result in heavy fines, operational restrictions, or perhaps a pressured unwinding of the Mellanox deal below Chinese language legislation, probably impacting NVIDIA’s enterprise ties in its third-largest market.

The corporate has but to touch upon the investigation, however its US-listed shares dropped 1.8% in pre-market buying and selling following the announcement. NVIDIA’s founder, Jensen Huang, just lately reaffirmed the corporate’s dedication to sustaining a presence in China, praising the nation’s strengths in AI growth regardless of rising tensions.

The Rise of Chinese language Competitors

China’s scrutiny of NVIDIA coincides with the nation’s push to strengthen its home semiconductor business. Huawei Applied sciences has accelerated efforts to develop alternate options, comparable to its Ascend 910C processor, which goals to rival NVIDIA’s A100 chips. This provides strain on NVIDIA, already navigating restrictions and regulatory hurdles.

The NVIDIA probe mirrors an identical motion in opposition to Micron Know-how in 2023, when Chinese language regulators banned its merchandise in crucial sectors, citing nationwide safety issues. These strikes underline Beijing’s technique to counter US tech dominance whereas boosting home gamers.

Because the tech battle intensifies, the NVIDIA investigation highlights the high-stakes battle between the world’s two largest economies, with AI and semiconductors on the coronary heart of their rivalry.