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China Launches Antitrust Probe Into Nvidia Amid US-China Chip Tensions

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China announced on Monday it has launched an antitrust investigation into Nvidia, targeting alleged violations of the country’s anti-monopoly law. This move is seen as a countermeasure to recent U.S. restrictions on China’s semiconductor industry, escalating tensions in the ongoing tech rivalry between the two nations.

The State Administration for Market Regulation (SAMR) stated that Nvidia, known for its AI and gaming chips, is under scrutiny for potentially breaching conditions set during its 2020 acquisition of Israeli chipmaker Mellanox Technologies. While details remain scarce, the regulator mentioned suspicions about Nvidia violating commitments to supply products on “fair, reasonable, and non-discriminatory” terms, among other stipulations.

Retaliatory Backdrop

This probe follows heightened tensions between Washington and Beijing. Last week, the U.S. introduced new restrictions on 140 Chinese companies, further curbing China’s access to advanced semiconductor technology. In response, Beijing banned exports of critical minerals like gallium, germanium, and antimony to the U.S.

In addition, four major Chinese industry associations called on domestic firms to reduce reliance on U.S. chips, labeling them “unsafe” and encouraging purchases from local suppliers. Nvidia, which once commanded over 90% of China’s AI chip market, has faced diminishing revenue from China, dropping from 26% of its global total two years ago to 17% by January 2023.

Nvidia’s shares fell by 2.5% on Monday following the announcement. The company stated it would cooperate with regulators and reaffirmed its commitment to honoring agreements in all regions. However, analysts like Bob O’Donnell from TECHnalysis Research believe the investigation’s immediate impact on Nvidia will be limited, as U.S. restrictions already prevent the sale of its most advanced chips to China.

Nvidia’s Strategic Adjustments

U.S. sanctions in 2022 prohibited Nvidia from selling its A100 and H100 AI chips to China, prompting the company to create modified versions for the Chinese market. Further tightened U.S. export controls in 2023 led Nvidia to develop new variants tailored to Chinese restrictions. Despite these challenges, Nvidia faces mounting competition from domestic players like Huawei.

China’s Antitrust Track Record

China’s antitrust probes into foreign tech companies are not new. The most prominent case occurred in 2013, when China fined Qualcomm $975 million for market abuse in wireless communication standards. Similar to that case, Nvidia is accused of practices such as discriminatory terms, product bundling, and unfair supply conditions—issues tied to the Mellanox acquisition conditions.

The investigation could signal Beijing’s intent to leverage regulatory tools to counter U.S. sanctions while fostering its domestic chip industry.

Apple Seeks Dismissal of US Smartphone Monopoly Lawsuit

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Apple is set to present its case to a federal judge, urging the dismissal of a U.S. Department of Justice (DOJ) antitrust lawsuit that accuses the tech giant of monopolistic practices in the smartphone market. The hearing, scheduled for Wednesday in Newark, New Jersey, before U.S. District Judge Julien Neals, marks another significant moment in the ongoing legal battles surrounding Big Tech companies and their market dominance. The DOJ alleges that Apple has unlawfully restricted competition by creating a tightly controlled ecosystem that limits interoperability between iPhones, third-party apps, and competing devices.

At the heart of the DOJ’s argument is Apple’s ecosystem strategy, which prosecutors claim locks users into its platform while stifling competition. By tightly controlling app distribution through the App Store and restricting developers’ access to core iPhone technologies, Apple allegedly ensures that alternative app marketplaces and cross-platform interoperability remain limited. These practices, according to the DOJ, make it difficult for competitors to thrive, ultimately reducing consumer choice in the marketplace.

Apple, however, argues that its approach is not only lawful but essential to maintaining a secure and innovative platform for its users. The company contends that its restrictions on third-party developers are reasonable measures aimed at ensuring privacy, security, and the overall quality of user experiences. Apple has further asserted that forcing it to open its ecosystem to competitors would risk undermining these priorities and discourage innovation in a highly competitive market.

The case has broader implications for the technology industry and antitrust enforcement in the United States. If the court sides with the DOJ, it could lead to significant changes in how Apple and other tech giants operate their platforms, potentially forcing greater openness and interoperability. Conversely, a dismissal would bolster Apple’s defense of its business practices and signal that courts may be reluctant to intervene in the operational choices of dominant technology companies. The outcome of this hearing is expected to influence the trajectory of antitrust regulation in the tech sector for years to come.

DOJ Reportedly Urges Google to Divest Chrome to End Search Market Dominance

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Top officials from the U.S. Department of Justice (DOJ) are reportedly preparing to ask a federal judge to mandate the sale of Google’s Chrome browser as part of a broader effort to address the company’s alleged monopoly in the search market. This move would mark a significant escalation in the ongoing antitrust case against Alphabet Inc., the parent company of Google. The DOJ has been investigating Google’s dominance in the digital advertising and search sectors for years, and this latest action is seen as a pivotal step in efforts to rein in its power.

In addition to the potential forced sale of Chrome, the DOJ is expected to request further measures aimed at curbing Google’s reach in areas such as Artificial Intelligence (AI) and its Android smartphone operating system. According to sources familiar with the matter, the department believes that these actions are necessary to restore competition and address Google’s unfair practices that harm both consumers and competitors.

Federal antitrust officials, along with several states that have joined the case, are also advocating for the imposition of strict data licensing requirements. These measures, expected to be recommended to Judge Amit Mehta, would force Google to allow its competitors greater access to the data it has long monopolized, potentially leveling the playing field for rival search engines and other tech companies in the digital space.

This unprecedented move against one of the world’s most powerful tech companies signals the DOJ’s commitment to tackling anticompetitive practices in the tech industry. If the judge agrees to these recommendations, it could set a major precedent for future antitrust actions in the rapidly evolving technology landscape.