The News
China’s markets regulator said it had launched a probe into US chipmaker Nvidia over suspected violations of its anti-monopoly law.
Nvidia is under scrutiny from various corners: The US Justice Department also sought information into whether the company had broken antitrust laws earlier this year, Bloomberg reported, and the head of France’s antitrust agency said Nvidia could face charges “one day” there at a press conference in July.
Nvidia has dominated the AI hardware market in recent years, with China ramping up efforts to build a homegrown alternative amid US sanctions.
SIGNALS
China is pursuing ‘supply chain warfare’
The probe is a sign of China’s increasing willingness to target companies throughout the high-tech sector in the country’s deepening trade war with the US. The strategy amounts to “supply chain warfare,” The New York Times wrote: “It’s clear for political reasons that Beijing is not willing to stand by and watch as significant new waves of tariffs come in,” a China scholar said. Yet Beijing has to pursue a balancing act as it seeks to grow its domestic industry: China relies on Nvidia’s chips to train AI, and the company, which gets about 15% of its annual revenue from China, has made modifications to its products to skirt Washington’s restrictions to sell there.
Efforts to codify US investment curbs hit snag
US House Democrats in recent days derailed a bipartisan push to effectively codify a Biden administration executive order restricting US investment in certain high-tech sectors in China. The proposal was removed from the annual defense policy bill at the last minute, Semafor’s Kadia Goba reported. The restrictions had been eyed warily by Wall Street — they largely affected private equity and venture capital that do business in China. They could still become law: House Speaker Mike Johnson is expected to attempt to attach it to the year-end continuing resolution, though political wrangling may make that difficult. US investment in China has declined since 2019 and hit a 10-year low of $1.3 billion in 2022. From 2005 to 2018, that figure was an average of $14 billion.