As President-elect Donald Trump gets ready to assume office for a second term, China accused U.S. chipmaker Nvidia on Monday of breaking its anti-monopoly legislation. This accusation is expected to worsen already strained economic ties between the two nations.
The investigation, according to China’s state market regulating body, is connected to Nvidia’s 2019 purchase of Mellanox, a multinational provider of computer networking hardware.
That transaction was tentatively authorized by China in 2020. Nvidia stated in a statement that it was “happy to answer any questions regulators have” regarding its operations.
“Our benchmark results and value to customers demonstrate that Nvidia wins on merit, and customers are free to select the solution that best suits their needs,” the company stated. “We strive to deliver the best products possible in every area and keep our word wherever we conduct business.”
Following Monday’s market opening, the company’s stock was down almost 3%.
A new set of export restrictions on U.S.-made semiconductors was unveiled last week by the departing Biden administration in an effort to prevent China from using them to create sophisticated artificial intelligence and weaponry.
China swiftly retaliated by imposing embargoes on vital supplies going to the United States and accused the country of intimidation and hypocrisy.
The United States engages in unilateral bullying, abuses export control mechanisms, and overstretches the idea of national security—all while preaching one thing and acting another. The Chinese Commerce Ministry warned in a statement last week that China “strongly opposes such actions.”
Although for various reasons, the United States and France have also launched inquiries into Nvidia’s market dominance.
The whole U.S. stock market has increased in value over the last year thanks to the Santa Clara-based startup, whose chips have emerged as the preferred processor for tech companies spearheading the AI revolution. Nvidia is now among the most valuable companies in the world, with its share price having roughly quadrupled in 2024.
When he becomes office, Trump has pledged to impose strict tariffs on China. A Chinese think group has criticized him as “anti-China,” and he just appointed former Georgia Senator David Perdue as the U.S. ambassador to China. Additionally, he appointed tariff-supporting economist Peter Navarro as his adviser on manufacturing and trade.
