Nvidia (NVDA) stock fell more than 2.5% on Monday after China launched an antitrust investigation into the semiconductor giant amid heightened tensions between China and the United States over the dominance of AI.
The investigation targets NVIDIA’s practices over possible antitrust violations. The company also plans to consider acquiring Mellanox in 2020. The merger was approved by China’s State Administration for Market Regulation on the condition that the semiconductor maker avoid discrimination against Chinese companies.
Chinese media reports say the government believes Nvidia’s $7 billion acquisition of an Israeli computer networking equipment maker may have violated Beijing’s antitrust laws.
The investigation comes about a week after the Biden administration implemented new semiconductor export controls aimed at restricting access to China’s advanced chips.
The latest U.S. measures include limits on high-bandwidth memory chips shipped to China, a critical component for AI training.
“As China struggles to keep up with cutting-edge AI chips, it likely wants to do everything it can to slow down U.S. companies,” Futurum Group CEO ‘s Daniel Newman told Yahoo Finance on Monday morning.
Nvidia did not respond to requests for comment.
China’s investigation into America’s most important semiconductor maker comes ahead of President Donald Trump’s return to the White House next month. President Trump has suggested raising tariffs as part of his policy.
“This is not just a regulatory issue, but a calculated geopolitical maneuver. China is sending a strong message that it will not hesitate to push back, and targeting NVIDIA is a precursor to more aggressive measures to come. “Yes,” said CEO Nigel Green. financial advisor De Vere Group said on Monday.
Nvidia stock hasn’t participated in the overall rally following President Trump’s election over the past month. The stock is up more than 1% since Trump’s victory.
Nvidia stock is up almost 190% so far this year.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow @ines_ferre on X.
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