NVIDIA seemed to be central to China’s AI aspirations, but in recent times we have seen the country begin to shed that dependency. And now that it apparently doesn’t need it as much, China has taken a unique step that could have a significant impact on the company.
Antitrust investigation into NVIDIA. Media like Financial Times indicate that China has launched an investigation against NVIDIA. The State Administration for Market Regulation (SAMR) has announced this measure, alleging that violations of antitrust regulations have been detected.
Implications. The measure point to China’s attempt to have greater control over foreign companies operating in its territory, but it is especially striking that they have decided to investigate NVIDIA. The company clearly dominates the AI chip market and has a notable market share in the Chinese technology ecosystem. The implications of this research could therefore be especially important, and could clearly harm the North American company.
Seeking independence from Western technology. The investigation also seems aimed at confirming the search for independence of Western companies, especially the United States. China announced a few days ago that it was not going to export gallium to the US, a critical mineral for the manufacture of semiconductors.
An eye for an eye? The trade war between both countries has already had clear consequences for companies like Huawei. This giant was vetoed by Google and has still managed to recover and become independent from Android with the launch of HarmonyOS NEXT. In China they now seem to want to avoid dependence on NVIDIA, and the government itself has asked companies to prioritize the purchase of AI chips from Chinese manufacturers. This may also be a response to the Biden administration’s latest move: sanctions on more than 140 Chinese semiconductor companies.
NVIDIA offside. It is curious, especially because NVIDIA knows how important China is to its results sheet and has tried to carry out measures to alleviate that tension with China. For example, they were expected to create specific versions of their new G200 chips with Blackwell architecture for the Chinese market.
NVIDIA shares fall. The first consequence of this antitrust investigation has already been noted. NVIDIA shares have fallen 2.1% in pre-market markets amid investor concern. The company has not yet made any statements about the Chinese investigation.
In Xataka | The Chinese industry “no longer trusts” US chips. It is very bad news for NVIDIA, Intel and Qualcomm