On Monday, a statement was made by the State Administration for Market Regulation China Central Television Announcing the investigation, but it does not discuss the specifics of NVIDIA’s suspected violations.
The authority approved NVIDIA. $6.9 billion acquisition of MelanicsAn Israeli company, in 2020 with certain conditions. Their goal was to prevent the tech giant from restricting competition in the markets for GPU acceleration, private internetworking devices, and high-speed Ethernet adapters.
See: EU investigating NVIDIA deal with Run:ai
Mellanox was required to provide information about new products to NVIDIA within 90 days of their availability to Chinese competitors and give them an opportunity to ensure their own products were compatible. Bloomberg. Conditions also include restrictions. Product bundling, discrimination against consumers who purchase separate products, and unreasonable trade terms.
An NVIDIA spokesperson told TechRepublic: “NVIDIA wins on merit, as demonstrated by our benchmark results and value for customers, and customers can choose the solution that’s best for them.
“We work hard to deliver the best products in every region and honor our commitments wherever we do business. We are happy to answer any questions regulators may have about our business.
The latest shot has been fired in the US-China chip war.
The investigation represents just the latest move in a years-long battle between the U.S. and China for dominance in the lucrative semiconductor market. NVIDIA is the leading supplier of artificial intelligence and gaming chips, announces Record revenue of $30 billion (£24.7 billion) in the second quarter of 2024.
The U.S. wants to maintain its existing sovereignty by preventing China from accessing NVIDIA’s latest hardware, which is critical to running advanced AI models. In addition to financial motivations, the US has also expressed concerns about China developing AI for military purposes.
In 2022, the US implemented its first set of chips. Export Controls on Sale of Semiconductors Beijing and separately Banned NVIDIA from selling its latest chips. In response to Chinese companies, NVIDIA developed a China-specific A800 And H100 Chips that were compliant with the new controls, enabling it to retain customers in the country.
That same year, the U.S. passed the CHIPS Act, which provided essential semiconductor research investment and manufacturing incentives and bolstered the U.S. economy, national security, and supply. It also launched a blueprint. AI Bill of Rights To help manage AI locally. Intel, TSMC, Texas Instruments, and Samsung – the world’s largest memory chipmaker – have announced plans to build fabs in the US.
See: The Global Chip Shortage: Everything You Need to Know
Then, in August 2023, China’s Ministry of Commerce imposed export controls on gallium and germanium-related commodities.To protect national security and interests“These rare metals are essential in chip production, and China produces them. 98% And 54% of the world’s supply of gallium and germanium respectively. According to data from the Financial Times, the price of the mineral is Almost double In the years since.
In October last year, the United States Another set of export restrictions On semiconductors, discontinuity Some flaws NVIDIA was exploited with the A800 and H100. Since then, chips have been giant. Preparing to release a new iteration which ignores the updated rules.
Nevertheless, the restrictions have greatly affected NVIDIA’s revenue in China. The country accounted for just 16.9 percent of its revenue in 2023, down 9.5 percent from 2021, according to Latest financial results.
Just last week, the Biden administration announced it. A third set of restrictions Extension of list of prohibited technologies, on semiconductor exports to China. Beijing responded with one. statementcalling it “a common practice of economic oppression and non-market practice”.
“The U.S. says one thing and does another, continues to publicize the notion of national security, abuse export control measures, and apply unilateral bullying,” a Commerce Department spokesman said. “China strongly opposes this.”
In response, China responded quickly. Sales of germanium and gallium to the US were banned.closed loopholes from its 2023 export controls, and included several U.S. defense tech startups that cannot do business in China.
The search for increasing AI autonomy around the world
It’s not just the US and China that want to reduce their reliance on other countries for AI chips. Both Japan and the Netherlands have agreements with the White House. Ban on sales of chip-making kits to China.
UK Blocked most license requests. For companies that want to export semiconductor technology to China in 2023. In the same year, the UK government announced that It will dedicate 100 million pounds. ($126 million) to boost AI hardware development and address potential computer chip shortages. Also Amazon Web Services Announced plans to invest £8 billion in data centres. in the country in the next five years
See: UK government announces £32m for AI projects after ending funding for supercomputers
The European Union offered €43 billion ($46 billion) in subsidies to boost its semiconductor sector with its European Chips Act, which was adopted In July 2023. The block also has a lofty production target. 20% of the world’s semiconductors By 2030
Global Antitrust Investigation into NVIDIA
NVIDIA is having trouble mediating the US-China chip wars. In addition to the Beijing investigation, there is the US Department of Justice Investigating whether a company has violated its own antitrust laws. According to Bloomberg, by punishing customers who buy from its competitors and making it difficult to switch suppliers.
See: AI surge could trigger global chip shortage by 2026
The President of the French Competition Authority, Benoit Couvre, has also said this. NVIDIA may “one day” face antitrust charges in the country In a July press conference, Bloomberg reported.