Jensen Huang, founder, president and CEO of Nvidia, speaks about the future of artificial intelligence and its impact on energy consumption and production at the Bipartisan Policy Center in Washington, D.C., on September 27, 2024.
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Nvidia Shares came under pressure on Monday after a Chinese regulator said it was investigating the chipmaker over potential violations of the country's antitrust law.
Shares ended the session down by about 2.6%.
The Chinese government said on Monday that the State Administration for Market Regulation has opened an investigation into the chip maker in connection with the acquisition of Mellanox and some agreements reached during the acquisition. Nvidia acquired the Israeli technology company that creates networking solutions for data centers and servers in 2020.
“In recent days, due to Nvidia's suspicion of violating China's anti-monopoly law and the restrictive conditions of the State Administration for Market Regulation around Nvidia's acquisition of Mellanox shares… the State Administration for Market Regulation is opening an investigation into Nvidia in accordance with the law.” According to a statement translated by CNBC.
The news comes as competition intensifies between the US and China over chipmaking capabilities, with the Biden administration on December 2 announcing a final series of restrictions. Targeting semiconductor tool makers. The news could also be a response to escalating trade tensions as President-elect Donald Trump prepares to take office in January, promising to impose massive tariffs on foreign goods.
The United States has tightened restrictions on chip sales to China in recent years, barring Nvidia and other major semiconductor manufacturers from selling more advanced artificial intelligence chips in an attempt to limit China's ability to bolster its military. The company has I worked on creating new products For sale in China that adheres to US regulations.
Shares of the AI darling company have outperformed this year, rising 180% as investors increase their bets on the sector more than two years after ChatGPT's debut. Stocks also helped push the market to new highs, along with the broader technology sector.
In a statement Obtained by NBC NewsNvidia said it was “happy to answer any questions regulators have” about its business.
“Nvidia wins on merit, as reflected in our benchmark scores and value to customers, and customers can choose which solution is best for them,” the chipmaker said.
— CNBC's Evelyn Cheng contributed reporting.
