My Take | With Nvidia antitrust probe, China hardens its stance towards US ‘AI partners’
Beijing may be looking to add teeth to its response to Washington’s escalating chip war, starting with a slap on the wrist for the AI-chip maker
The high-profile probe could be read as a warning shot at Nvidia rather than a punishment. The national foreign ministry, for instance, has not been shy about putting US businesses considered hostile to China on a sanctions list, ordering Chinese individuals and businesses to sever ties to sanctioned companies and denying visas to executives from the targeted businesses. Infractions include crossing China’s “red lines” such as selling weapons to Taiwan.
Nvidia’s situation is less serious than what Micron faced last year. In May 2023, the US memory chip maker had to cope with allegations from the Cyberspace Administration of China that its products presented “national security” risks, and China’s key information infrastructure operators were ordered to stop buying from Micron.
The likely worst case scenario for Nvidia, a fabless chip designer that still has business in China, is paying a fine to the national market regulator for “rectification”, similar to what Qualcomm went through in 2015.
The National Development Reform Commission (NDRC) – China’s antitrust authority before the role was given to the State Administration for Market Regulation – fined Qualcomm 6.1 billion yuan, or about US$1 billion at the time, after a year-long probe into the dominant mobile chip designer over allegations that it abused its market power. A decade later, China remains Qualcomm’s largest market.
The Post reported that Nvidia could be fined up to US$1 billion if it is found to have violated the Anti-Monopoly Law, an amount that one of the three most valuable companies in the world could easily bear. In such an outcome, it would be business as usual for Nvidia in China.
