Nvidia Hit With Antitrust Probe in China, Stock Slides

Nvidia Corp NVDA stock slid in the premarket Monday after a Chinese regulator said it was investigating the chipmaker over a possible breach of the country’s antitrust regulations.

The State Administration for Market Regulation alleged the chip designer violated its obligations while acquiring Mellanox Technologies, Reuters reports. Previously, Nvidia’s potential acquisition of Arm Holdings ARM succumbed to global regulatory opposition.

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Nvidia’s offer to acquire Run:ai has drawn regulatory attention from the European Commission.

In 2024, U.S. antitrust authorities scrutinized Nvidia over possible influence within the artificial intelligence chip sector. The Justice Department sought Nvidia’s contract and partnership details. Additionally, the Federal Trade Commission (FTC) is reviewing investments by major technology firms.

The U.S. and China remained embroiled in geopolitical tensions as the Biden administration. imposed semiconductor sanctions on China, thereby restricting the country’s access to advanced artificial technology chips and GPUs of Taiwan Semiconductor Manufacturing Co TSM and Nvidia.

Reportedly, Nvidia could earn $12 billion in sales from 1 million H20 GPUs in China in 2024.

Last week, the U.S. launched its third semiconductor sanction on China, which focused on the export of advanced chips and chipmaking equipment to China. China retaliated by exercising tighter controls on the export of critical minerals used in advanced chip manufacturing.

Since his campaign days, President-elect Donald Trump has threatened to slap tariffs on exports to China of up to 60%, prompting China to launch fiscal stimulus to drive the economy and protect itself from the tariffs. The tariffs could reduce Chinese exports to the U.S. by about $200 billion and affect China’s GDP.

Trump’s threats to launch a 25% tariff on Mexican imports prompted Nvidia and Intel Corp INTC suppliers to reconsider Mexico operations.

Nvidia stock surged 196% year-to-date. Investors can gain exposure to the stock through ProShares Ultra Semiconductors USD and EA Series Trust Strive U.S. Semiconductor ETF SHOC.

Price Action: NVDA stock is down 1.85% at $139.86 at last check Monday.

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