China looking into NVIDIA for violating anti-monopoly laws

China’s State Administration for Market Regulation (SAMR) has launched an investigation into NVIDIA for possibly violating the country’s anti-monopoly laws.

The Chinese market supervisor also said that NVIDIA is suspected of making mistakes during its acquisition of Mellanox Technologies Ltd., which were outlined in the regulator’s 2020 conditional approval.

“In recent days, due to NVIDIA’s suspected violation of China’s anti-monopoly law and the State Administration for Market Regulation’s restrictive conditions around NVIDIA’s acquisition of Mellanox shares, the State Administration for Market Regulation is opening a probe into NVIDIA in accordance with law,” a statement translated by CNBC says.

China’s market supervisor didn’t elaborate on how NVIDIA might have violated China’s anti-monopoly laws. NVIDIA didn’t respond immediately to a request for comment. The company’s shares fell 2.2% after the news got out.

The news follows amidst escalating geopolitical tensions between the United States and China.

Earlier this month, president Joe Biden amped up restrictions on chip sales to China. Companies like NVIDIA are prohibited from selling their most advanced CPUs and AI chips to China in order to slow down the strengthening of China’s military and technological capabilities.

In September, Washington pressured countries like Japan and the Netherlands to join export controls, targeting China’s access to cutting-edge chips and chipmaking equipment.

“In recent years, in order to maintain its global hegemony, the United States has continued to coerce certain countries to tighten export control measures for semiconductors and related equipment. China is resolutely opposed to this,” China’s ministry of Commerce said in response to the Dutch government’s announcement to no longer export DUV immersion lithography tools to China at the time.

President Xi Jinping has said more than once that he wants to have the most advanced army in the world by 2049. To achieve that goal, he’s investing large amounts of money in the technological development of the People’s Republic of China’s Liberation Army.

Another way of gaining a technological advantage, it is said that China is deploying students and expats all over the world to work for tech companies that are developing high-end advanced technologies that can be used for both military and civilian applications. It is expected of them to bring home as much knowledge and company secrets as they can that can help advance China’s military capabilities.

China has always denied these practices and allegations.