China escalates trade confrontation with US, accusing Nvidia of antitrust violations
Kyiv • UNN
China accused Nvidia, a key AI chip supplier, of antitrust violations amid trade talks with the US.
On Monday, China significantly escalated its trade confrontation with the United States, stating that the technology giant Nvidia, the most valuable company on the US stock market and a key supplier of artificial intelligence chips, violated antitrust laws, UNN reports with reference to CNN.
Details
The announcement of the preliminary antitrust investigation results by Chinese regulators came amid the fourth round of trade talks between American and Chinese diplomats in Madrid this week. US Treasury Secretary Scott Bessent, who is leading the negotiations for the US side, said on Sunday that the talks were progressing successfully.
However, the Trump administration also increased pressure ahead of the talks. On Friday, the US Department of Commerce added two Chinese chip manufacturers to the so-called Entity List, prohibiting GMC Semiconductor Technology Co. and Jicun Semiconductor Technology from purchasing American semiconductor technologies.
Despite trade talks, China and the US are responding with mutual actions to each other's trade moves, trying to benefit from the tense situation. For example, the US has virtually banned the export of key AI technology equipment to China, while China is slowly fulfilling promises to supply rare earth metals used in a wide range of electronics and defense equipment.
China's latest actions against Nvidia are much more aggressive and could be a signal to the US that the Trump administration's recent promises to open access to Nvidia chips to China may not be as favorably received as the White House expected. Both China and the US believe that AI and the chips it relies on are crucial for national security. Although Chinese technology currently lags behind American technology, it is gradually catching up.
Last month, Trump announced that he had reached an agreement with Nvidia and another chipmaker, AMD, to pay the US government 15% of their revenue from semiconductor sales to China in exchange for export licenses to China for some more powerful, but still scaled-down versions of their technologies. This agreement will help the Trump administration maintain America's dominance in artificial intelligence while advancing important trade negotiations with China.
Nvidia and AMD to give US 15% of chip sales profit in China - report11.08.25, 08:19 • 3644 views
Nvidia CEO Jensen Huang, with whom Trump struck a deal in the Oval Office last month, has become a regular visitor to the White House, seeking to advance shared interests. Huang is scheduled to meet with Trump during his visit to the UK this week.
China vs. Nvidia
According to the publication, it is not yet clear whether China will punish Nvidia. The Chinese market regulator said it would conduct an additional investigation into the company. The decision to continue the investigation was made after an initial investigation launched in December.
Nvidia was found to have violated the terms of the regulator's conditional approval of its acquisition of Israeli chip designer Mellanox Technologies, China's State Administration for Market Regulation said in a statement, without providing further details. China approved the acquisition in 2020.
Nvidia (NVDA) shares fell 1.4% in premarket trading after the announcement.
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Context
In April, the White House blocked the export of some artificial intelligence chips to China, including Nvidia's H20 and AMD's MI308 chips. An unprecedented agreement with the Trump administration, reached last month, allows companies to obtain export licenses to resume sales of these chips in China, a US official told CNN.
Nvidia released the H20 chip last year to maintain access to the Chinese market, which accounted for 13% of the company's sales in 2024, amid US export controls imposed by the Biden administration.
Despite Trump opening up H20 chip shipments to China last month, it's unclear whether China will accept them. These chips raise security concerns for China, a social media account linked to Chinese state media reported days after the White House announced permission for sales to China.
And China, in any case, is highly likely to get access to the chips on the black market. It is widely believed that H20 chips were used to develop DeepSeek, a cutting-edge Chinese artificial intelligence model that impressed Silicon Valley after its launch earlier this year, raising fears that China has advanced further in artificial intelligence than previously thought.