China has accused U.S. chipmaker Nvidia of violating its anti-monopoly law, a move that is likely to worsen already tense trade relations between the two countries as President-elect Donald Trump prepares for his second inauguration.

In a statement released Monday, China’s state market regulator said the investigation was related to Nvidia’s 2019 acquisition of Mellanox, a global provider of computer networking equipment.

China agreed to this takeover under conditions in 2020.

An Nvidia spokesperson did not immediately respond to a request for comment. The company’s shares fell about 3% after the market opened on Monday.

Last week, the outgoing Biden administration announced a new set of export controls on U.S.-made semiconductors designed to limit China’s ability to use them to develop weapons and advanced artificial intelligence systems.

China immediately responded by accusing the US of bullying and hypocrisy while imposing embargoes on critical materials against the US

“The United States preaches one while practicing the other by overbroadening the concept of national security, abusing export control measures, and engaging in one-sided harassment. China strongly opposes such measures,” the Chinese Ministry of Commerce said in a statement.

The US and France have also launched investigations into Nvidia’s market dominance, but for different reasons.

Over the past year, the Santa Clara-based company, whose chips have become the processor of choice for tech companies leading the AI ​​revolution, drove the entire U.S. stock market higher. In 2024, Nvidia’s share price has almost tripled, making it one of the most valuable companies in the world.

Trump has promised to impose high tariffs on China when he takes office. He recently nominated former Georgia senator David Perdue, whom a Chinese think tank had called “anti-China,” to the role of U.S. ambassador to that country. He also hired tariff-supporting economist Peter Navarro as a trade and manufacturing adviser.