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Nvidia (NVDA) is under investigation for allegedly violating anti-monopoly laws in China.
The country’s State Administration for Market Regulation has launched a probe into whether Nvidia’s acquisition of Israeli chip designer Mellanox Technologies violated anti-monopoly laws, according to a report from China Central Television on Monday.
Shares of Nvidia fell nearly 2% in pre-market trading on Monday.
The leading artificial intelligence chipmaker bought Mellanox for $6.9 billion in 2020 after receiving conditional approval from Chinese authorities. Conditions included requirements that Nvidia and Mellanox not bundle or tie together products, continue to supply on fair terms, and ensure that chips from Chinese manufacturers worked with the technology.
Other requirements were aimed at maintaining independence between the two firms, and lessening any potential impacts of export controls amid the trade war between the U.S. and China that began in 2018 under the first Trump administration.
This comes as chip trade tensions between the two economic superpowers continue to escalate. Last week, the Department of Commerce introduced more restrictions on the sale of high-bandwidth memory and chipmaking tools to China, including tools produced by U.S. companies abroad.
The new rules include controls on 24 types of semiconductor manufacturing equipment, as well as on three types of software tools that can be used to develop or produce chips, the Commerce Department’s Bureau of Industry and Security said.d
Another 140 unnamed Chinese entities — including semiconductor fabs, tool companies, and investment firms — accused of working on behalf of the Chinese government were added to the U.S. trade blacklist.
According to the agency, the curbs are aimed at slowing China’s advanced AI developments that have “the potential to change the future of warfare” and “impairing” China’s development of its chip ecosystem.
Last month, the U.S. reportedly asked Taiwan Semiconductor Manufacturing Company (TSM), the world’s largest chipmaker, to stop sending its advanced AI chips to China.
— Britney Nguyen contributed to this article.