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Nvidia stock drops as China probes the chipmaker over potential antitrust violations
Nvidia shares fell on Monday on news that the chipmaker is being investigated for potentially violating anti-monopoly rules in China.
Shares of the chipmaker were down over 3% shortly after the opening bell, trading around $137.91 a share.
Shares slid after China's State Administration for Market Regulation said it was looking into Nvidia's acquisition of Mellanox, a chip design firm Nvidia purchased for $6.9 billion in 2019.
Nvidia got the green light from Chinese regulators to complete the deal in 2020, but regulators are now looking into whether Nvidia violated the conditions of the deal, which included rules that would have prevented Nvidia and Mellanox from combining products or discriminating against Chinese firms.
"In recent days, due to Nvidia's suspected violation of China's anti-monopoly law and the State Administration for Market Regulation's restrictive conditions around Nvidia's acquisition of Mellanox shares ... the State Administration for Market Regulation is opening a probe into Nvidia in accordance with law," the administration said in a statement on Monday, per a translation from CNBC.
Nvidia did not immediately respond to a request for comment from Business Insider.
The move by China's regulators follows the Biden administration's fresh restrictions on the country's chip capabilities this month. The US introduced new controls aimed at curbing exports to chip companies in China, with 140 firms targeted by the latest measures.
Regulatory scrutiny of Nvidia has grown in recent years. Last wee, the company was hit with an antitrust investigation from EU regulators, who said they were looking into the firm's sales practices. The company is also being probed by the Department of Justice for potential antitrust violations.
"We compete based on decades of investment and innovation, scrupulously adhering to all laws, making Nvidia openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them," Nvidia said in a statement to Reuters shortly after the DOJ investigation was launched.
Shares of the chip maker are up almost 190% in 2024, as the artificial intelligence boom continues. Lately, excitement over Nvidia's next-gen chips , dubbed Blackwell and Rubin, has helped generate even more bullishness among investors and analysts.
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