China launched an investigation on Monday into U.S. chip giant Nvidia for allegedly violating its anti-monopoly laws, a top government agency said, as the two countries vie for global chipmaking supremacy.

According to a statement posted online, Beijing’s state agency for market regulation, the Antitrust Authority, opened the investigation “in accordance with the law.”

Nvidia is also suspected of violating commitments it made in 2020 when it acquired Israeli data center company Mellanox, the statement said.

Nvidia shares fell on Monday after Beijing announced the investigation.

Nvidia did not immediately respond to a request for comment.

China and the United States have clashed in recent weeks over the export of key chipmaking technology, with Nvidia a key player.

Beijing said last week it would restrict exports of some key semiconductor manufacturing components to the United States after Washington announced restrictions targeting China’s ability to make advanced chips.

Materials banned from export include the metals gallium, antimony and germanium, China’s Commerce Ministry said in a statement, citing concerns over “national security.”

In its latest restrictions, Washington announced restrictions on sales to 140 companies, including Chinese chip firms Piotech and SiCarrier, without additional approval.

The move expands Washington’s efforts to curb exports to China of cutting-edge chips that can be used in advanced weapons systems and artificial intelligence.

The new U.S. rules also include controls for two dozen types of chip-making equipment and three types of software tools for semiconductor development or production.

The US tech giant reported a rise in profits due to strong demand for its artificial intelligence technology.

In November, Nvidia overtook Apple to become the world’s highest-valued company as the artificial intelligence boom continues to excite Wall Street.

But the Chinese market was a rare weak point.

The U.S. government blocked Nvidia in 2023 from selling some of its top AI chips to China, which the U.S. views as a strategic competitor in advanced semiconductors.

Although Nvidia reported record-breaking quarterly sales in November, investors were concerned about a renewed escalation of tensions between the US and China with the return of Donald Trump to the White House.

But during an event in Hong Kong last month, Nvidia’s Taiwan-born CEO Jensen Huang told reporters: “Open science and open research in AI is absolutely global” and that “nothing” would stop that.

© 2024 AFP