China has officially opened a probe into US chipmaker Nvidia – accusing the company of flouting its anti-monopoly laws. The move will undoubtedly sour relations between the two superpowers.
This announcement follows a new set of export controls levied by the Biden administration on US-made semiconductors last week. China has accused the US of bullying and hypocrisy, in response.
The US and China have maintained a particularly uneasy relationship in recent years, with the federal government currently hell-bent on banning TikTok over national security fears. The imminent return of avowed China-skeptic Donald Trump to the White House promises to strain relations even further.
China Probes US Chipmaker Nvidia
US chipmaker Nvidia is facing a probe by Chinese regulators, it has been announced. Reportedly, the investigation relates to Nvidia’s acquisition of Mellanox in 2019, which was conditionally approved by the Chinese government in 2020.
On Monday, China Central Television confirmed that the purchase could have violated the country’s anti-monopoly laws, although it did not specify under which grounds. Nvidia is currently under investigation domestically and in France, although on separate charges.
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The timing of the probe is unlikely to be a coincidence. Last week, the outgoing Biden-Harris government unveiled a set of new controls on the exporting of US-made semiconductors. In theory, these measures will make it more difficult for China to develop weapons and AI systems.
In response, the Chinese government has attacked the US for “preach[ing] one thing while practicing another, excessively broadening the concept of national security, abusing export control measures, and engaging in unilateral bullying.”
Nvidia Caught in the Crosshairs
As the world’s largest provider of processors that are integral in AI development, Nvidia finds itself occupying a curious position at the intersection of innovation and geopolitics. The company’s prominence has skyrocketed in recent months, with a new chip announcement in June sending its valuation soaring.
This year alone, its share price has tripled, marking it as one of the most valuable tech firms in the world. This market dominance is coming into question, with the US and France launching separate probes into how the company came to control an estimated 95% of market share for AI chips.
As the AI race heats up, Nvidia will continue to exert an enormous influence over the technology sphere, with the company a firm favorite of the biggest players in the space, including OpenAI, Meta, and X. It will be interesting to see what kind of precedent this present probe sets, and whether it will stymie Nvidia’s growth over the coming months.
US-China Relations Go From Bad to Worse
For years, there has been no love lost between these two global superpowers. As Chinese technological and economic growth has outstripped any other nation on Earth, paranoia has grown in the US. During his first term, former President Trump stoked these national anxieties, appearing to blame the outbreak of the Covid-19 pandemic on Beijing.
With Trump set to take office for a second term, there is renewed public concern over how this grudge could unfold. The President-elect has made a series of cabinet nominations that hint at a certain direction, while also promising to levy substantial tariffs against China.
Nothing is yet certain, but the ongoing conflict between the US and China – which almost exclusively plays out in the arena of trade – is showing no signs of abating.
