Technology

Nvidia shares fall as China initiates antitrust investigation into AI chip leader

Nvidia (NVDA) shares dropped over 2.5% on Monday following China’s launch of an antitrust inquiry into the semiconductor titan, amid rising tensions between Beijing and Washington regarding supremacy in artificial intelligence.

The investigation focuses on Nvidia’s operations for potential anti-competitive infractions, and will also examine its 2020 acquisition of Mellanox, which was authorized by China’s State Administration for Market Regulation with stipulations to prevent bias against Chinese firms.

A report from Chinese media indicates that the government suspects Nvidia’s $7 billion acquisition of the Israeli networking equipment firm might contravene China’s antitrust legislation.

This development arrives just a week after the Biden administration unveiled another set of export restrictions on semiconductors designed to limit China’s access to advanced technology.

The recent US actions include restrictions on high bandwidth memory chips sent to China, critical components for AI development.

“As China continues to lag behind in accessing cutting-edge AI chips, they may seek to hinder US companies, where possible,” said Daniel Newman, CEO of The Futurum Group, in a statement to Yahoo Finance on Monday morning.

Nvidia has not yet responded to requests for comments regarding the investigation.

This scrutiny of the leading US chipmaker also precedes Donald Trump’s expected return to the presidency next month, during which he has cautioned about potential tariff increases as part of his strategy.

“This is more than just a regulatory matter; it’s a strategic geopolitical tactic,” stated Nigel Green, CEO of the financial advisory firm deVere Group, on Monday. “China is signaling its readiness to push back, and this targeting of Nvidia could indicate a shift towards more assertive actions.”

Nvidia shares have lagged behind the general Trump post-election surge in the past month, rising just over 1% since his electoral victory.

So far this year, Nvidia stock is up nearly 190%.

Blogger-Net

About Author

Leave a comment

Your email address will not be published. Required fields are marked *