Nvidia shares experienced a 2.6% drop on Monday following an announcement by China’s State Administration for Market Regulation (SAMR) regarding an investigation into the chipmaker for potential violations of the country’s antimonopoly law. The probe is linked to Nvidia’s 2020 acquisition of Mellanox, an Israeli firm specializing in network solutions for data centers.
SAMR’s inquiry focuses on restrictive conditions tied to the acquisition, signaling rising regulatory scrutiny. Nvidia stated its willingness to cooperate fully, emphasizing its commitment to merit-driven competition.
This development unfolds amidst intensifying U.S.-China tensions over semiconductor technology. Recently, the Biden administration imposed stricter restrictions on the sale of advanced AI chips to China, aiming to limit their potential military applications. Nvidia, alongside other chipmakers, has been adapting its products to comply with these regulations.
Despite Monday’s decline, Nvidia’s shares have surged 180% this year, reflecting robust investor confidence in the booming AI sector. The chipmaker’s performance continues to drive growth in the broader technology market.
Nvidia reaffirmed its commitment to transparency and cooperation in navigating these regulatory challenges, maintaining focus on innovation and customer satisfaction.