NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) shares fell in pre-market trading on Monday as news broke China would investigate the chip-making giant over suspected anti-monopoly law violations.
Beijing unveiled the investigation days after US President Joe Biden’s administration launched its third crackdown on China’s semiconductor industry in as many years.
China’s State Administration for Market Regulation did not elaborate on the potential breaches but said Nvidia was also suspected of violating commitments made in 2020 during its acquisition of Mellanox Technologies Ltd.
Nvidia had previously dominated China’s artificial intelligence chip market with a roughly 90% share but has faced pressure on the back of Washington’s crackdowns.
The latest saw exports to 140 firms curbed, including chip equipment producers.
"China launching an antitrust probe into US AI chip giant Nvidia marks the start of what is likely to be a systematic strategy to retaliate against the US, as both nations prepare for an economic showdown fueled by tariffs and technology dominance," Nigel Green, head of investment firm deVere Group, said.
"This isn’t just a regulatory issue; it’s a calculated geopolitical manoeuvre.
"China is sending a strong message that it won’t hesitate to push back, and Nvidia’s targeting is a harbinger of more aggressive measures to come."
Shares in Nvidia slipped 2.3% to US$139.10 in pre-market trading.