The stock of Nvidia (NVDA) is down 2% on news that Chinese regulators are probing the U.S. chipmaker over possible violations to the country’s anti-monopoly law.
China’s State Administration for Market Regulation opened an investigation into Nvidia related to its acquisition of Mellanox Technologies Ltd., an Israeli computer networking equipment maker.
The Chinese government had approved Nvidia’s $7 billion U.S. acquisition of the Israeli computer networking equipment maker on condition that Nvidia not discriminate against Chinese firms.
Now, the regulator in Beijing is saying that Nvidia has broken its pledge in the Mellanox acquisition.
The news comes as competition heats up between the U.S. and China over chipmaking capabilities.
The American government recently announced a slew of restrictions on U.S. semiconductor tools that can be exported to China.
The U.S. has increased its restrictions on microchip sales to China in recent years, barring companies such as Nvidia from selling their most advanced technology to the American rival.
The U.S. government has expressed concerns that China is using U.S. chip technology to strengthen its military capabilities.
Nvidia has responded by creating new, less powerful products that can be sold to China that abide by U.S. regulations.
Still, Nvidia, as the world’s leading maker of microchips and processors used in artificial intelligence (A.I.), appears to be getting caught up in geopolitical tensions.
The stock of Nvidia has risen 196% so far in 2024 to trade at $142.44 U.S. per share.
