In latest trade warning to US, China says Nvidia violated anti-monopoly law
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BEIJING, Sept 15 (Reuters) – China on Monday accused Nvidia (NVDA.O).of violating the country’s anti-monopoly law, the latest escalation in its trade war with the United States that has claimed the chipmaker as collateral damage.
The statement from China’s market regulator was made after what it said was a preliminary probe into Nvidia’s business practices, and comes as the two countries hold trade talks in Madrid, where chips are expected to be on the agenda.
U.S. Treasury Secretary Scott Bessent called the announcement from China’s State Administration for Market Regulation “poor timing,” a move analysts said gave China leverage in the trade talks.
The two countries have traded barbs over the past six months since U.S. President Donald Trump hit China with massive tariffs, before lowering them to 30%, and threatened to shut down popular social media app TikTok. China has responded with 10% tariffs and antitrust probes against the likes of Alphabet’s (GOOGL.O), Google, signaling more regulatory scrutiny on U.S. firms.
Zhengyuan Bo, partner at research company Plenum, said:
It’s a warning that if the U.S. export control paradigm operates in the same way as in the past several years there will be consequences, and China is willing to inflict damage on U.S. companies,
He added that SAMR’s preliminary ruling was likely a counter to the Trump administration’s decision on Friday to place 23 Chinese companies on a U.S. trade blacklist.
China’s announcement piles on more uncertainty for Nvidia’s business in China, which last year accounted for 13% of its total sales.
It shows that CEO Jensen Huang’s charm offensive in China is not enough. Huang visited the country three times this year to signal his commitment to the Chinese market, and has said that selling AI technology to that country is key to the United States’ ambitions to be a leader in the business.
Despite big demand from Chinese tech firms including Tencent (0700.HK), and TikTok parent ByteDance for Nvidia’s chips that are needed to build out infrastructure for soaring AI workloads, Reuters has reported that China has discouraged the firms from such purchases as it tries to wean itself off U.S. technology. Beijing last month also asked Nvidia to explain whether its H20 chip, made specifically for the Chinese market, posed backdoor security risks that could affect Chinese user data and privacy.
Even after the U.S. authorized export licenses allowing Nvidia to sell H20 chips in exchange for 15% of its sales in the country, the chipmaker has not sent any H20 chips to China because the U.S. has yet to come up with rules on how to get the payment. The uncertainty over the China business has pressured Nvidia stock, which fell 2% on Monday before paring losses.
Nvidia, said in a statement that it was complying with the law and would,
continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets.
The company declined to comment further on where it stood with the U.S. government on paying the 15% share of its China revenue. The U.S. Department of Commerce and the White House did not immediately respond to requests for comment.
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In latest trade warning to US, China says Nvidia violated anti-monopoly law, source
