Nvidia faces Chinese investigation amid retaliation for US trade restrictions

Nvidia's shares fell as China opened a probe into the tech giant on suspicions of violation of the country's anti-monopoly law. The investigation followed the Biden administration's fresh restrictions on AI chip export to China, announced a week ago, marking an escalation of the trade war between the two countries. 

China's State Administration for Market Regulation announced on Monday that it had officially launched an investigation into Nvidia regarding its acquisition of Mellanox Technologies Ltd, an Israeli technology firm, four years ago. The acquisition has been approved by Beijing subject to a number of conditions. The Administration said Nvidia is suspected of violating these commitments made as part of the approval process. 

In 2020, Nvidia acquired Mellanox Technologies Ltd for $7bn (€6.6bn) to enhance its data centrer's capabilities. Mellanox specialised in networking technology, and Nvidia stated that the merger would enrich the "ecosystem of partiers" in the AI field. In a condition made with the Chinese government, Mellanox would need to share information with rivals of new products within 90 days before release. 

On 2 December, the US announced new export restrictions to curb China's ability to develop the most advanced AI technology, citing "national security" concerns. The new rules targeted 140 additional Chinese companies that produce critical chips to supply China's tech industry with "self-efficiency".

China condemned the US decision, accusing it of "generalising the concept of national security, abusing export control measures, and implementing unilateral bullying", and vowed to "take necessary measures to resolutely safeguard its own rights and interests". 

The next day, Beijing imposed an export ban on