China opened an antitrust investigation into Nvidia for potential monopolistic practices in GPU supply.

Beijing's state administration for market regulation launched a formal investigation into US chip giant Nvidia on Monday for allegedly violating its anti-monopoly laws, as the two countries intensify their race for global chipmaking dominance. The investigation was triggered partly by lukewarm economic data and dampened investor enthusiasm for AI—a sector that has been a significant driver of this year's stock market gains. Nvidia is also suspected of violating commitments it made in 2020 when it acquired Israeli data center firm Mellanox. Following the announcement, Nvidia's shares dropped 2.6 percent by Wall Street's close on Monday, precipitating a broader US stocks retreat. An Nvidia spokesman responded: "We are happy to answer any questions regulators may have about our business," adding that the company succeeds "on merit... and customers can choose whatever solution is best for them."

The investigation reflects escalating tensions between Washington and Beijing over chipmaking technology exports. Beijing last week announced restrictions on exports to the United States of the metals gallium, antimony and germanium—materials critical to semiconductor production—citing "national security" concerns. Washington has responded by announcing restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional permission. The new US rules also include controls on two dozen types of chipmaking equipment and three kinds of software tools for developing or producing semiconductors.

Despite its dominance in AI chips, Nvidia has faced headwinds in the Chinese market. The US government restricted Nvidia in 2023 from selling some of its top AI chips to China, which the United States views as a strategic competitor in advanced semiconductors. Although Nvidia reported record high quarterly revenue in November and surpassed Apple to become the highest-valued company in the world as the AI boom continues to excite Wall Street, investors have grown wary of US-China tensions reheating with the return of Donald Trump to the White House. During an event in Hong Kong last month, Nvidia's Taiwan-born CEO Jensen Huang sought to reassure observers, telling reporters that "open science and open research in AI is absolutely global" and that "nothing" would stop that.