China on Monday said it has launched an investigation into Nvidia Corp (NVDA.O) over suspected violations of the country's anti-monopoly law, in a move that will likely be seen as a retaliatory move against Washington's recent chip curbs.
The State Administration for Market Regulation (SAMR) said the U.S. chipmaker is also suspected of violating commitments it made during its acquisition of Mellanox Technologies Ltd, according to terms outlined in the regulator's 2020 conditional approval of that deal.
It did not elaborate on how Nvidia might have violated China's anti-monopoly laws.
Nvidia did not immediately respond to a request for comment. The company's shares fell 2.2% in premarket trading after the Chinese regulator's announcement.
The investigation comes after the U.S. last week launched its third crackdown in three years on China's semiconductor industry, which saw Washington curb exports to 140 companies, including chip equipment makers.
Nvidia has enjoyed booming demand from China, though this has been dented over the past year by U.S. efforts to stop China from acquiring the world's most advanced chips.
Before the U.S. curbs, Nvidia dominated China's AI chip market with more than 90 per cent share. However, it currently faces increasing competition from domestic rivals, chief among them being Huawei.
When the U.S. firm made a $6.9 billion bid to acquire Israeli chip designer Mellanox Technologies in 2019 there were concerns that China could block the deal due to U.S.-China trade frictions.
Beijing however later approved the deal in 2020 with multiple conditions for Nvidia and the merged entity's China operations, including prohibitions on forced product bundling, unreasonable trading terms, purchase restrictions, and discriminatory treatment of customers who buy products separately.
