The chip titan appears to have breached Middle Kingdom’s oh-so-sacred anti-monopoly laws, although the State Administration for Market Regulation has offered no details on Nvidia's supposed misdeeds. Although to be fair we are still waiting for proof from the US government that Huawei was doing anything other than being an effective rival to American telecom companies.
The Chinese hinted that Nvidia may have broken some promises tied to its 2020 Mellanox acquisition. China graciously approving the deal as long as Nvidia played nice and followed some "fair, reasonable, and non-discriminatory" rules. Three years later, Beijing’s bringing it up like an ex rehashing an old argument.
The investigation is seen as a not-so-subtle jab at Washington's latest moves in their endless game of semiconductor chess. Last week, the US cracked down on chip exports to China (again), banning sales to 140 companies. Beijing retaliated by cutting off America’s supply of gallium and germanium, minerals essential for chips.
Not to be outdone, China's top industry associations have issued dire warnings about US chips being "no longer safe." Their genius advice? Buy local. Because what could possibly go wrong with a bit of forced patriotism?
Nvidia’s stock took a mild hit, closing 2.5 per cent lower on Monday, but the company is doing its best not to look too bothered. A spokesperson delivered the usual corporate platitudes: “We work hard to provide the best products we can in every region and honour our commitments everywhere we do business." Translation: *Please, let’s all be civil.*
Chief analyst Bob O'Donnell said the probe probably won’t hurt Nvidia too much, especially since its fanciest chips are already banned in China.
“It’s clear that the Chinese government is trying to react against recent restrictions from the US, but their ability to impact the U.S. semiconductor industry continues to decrease over time,” he said.
This isn’t China’s first anti-monopoly rodeo. In 2013, China slapped Qualcomm with a $975 million fine for daring to overcharge customers. Now, Nvidia is in the spotlight, with Beijing dragging out the same playbook: no bundling, unreasonable terms, and no discriminating against customers who dare to buy products separately.
