Nvidia is being investigated by China. What does this indicate?

By Adebayo Balogun On December 9, the Chinese government announced an antitrust investigation into chip giant Nvidia. In response to this, most of the media interpreted it as China’s suppression of American enterprises in the China-US trade war. And before Nvidia was investigated, the US had imposed sanctions on more than 140 Chinese companies. Afterward, […]

By Adebayo Balogun

On December 9, the Chinese government announced an antitrust investigation into chip giant Nvidia. In response to this, most of the media interpreted it as China’s suppression of American enterprises in the China-US trade war. And before Nvidia was investigated, the US had imposed sanctions on more than 140 Chinese companies. Afterward, it even announced sanctions against two Chinese drone giants. These facts seemingly prove the rationality of this interpretation. It seems that these companies are becoming the battlegrounds in the China-US political struggle, and various companies are being reduced to the victims of politics. But is this the whole truth?

In fact, it’s not the first time that Nvidia has been targeted by governments of different countries. As early as September 2020, when Nvidia planned to acquire part of the business of the chip manufacturing company Arm Limited, it had already raised concerns among the UK’s Competition and Markets Authority (CMA). Since 2023, Nvidia has frequently faced antitrust accusations in multiple countries. First, in September 2023, France announced that it would launch an antitrust investigation into Nvidia. Then, in December 2023, the European Union’s antitrust regulators began to review Nvidia’s business practices. Even in the US, where Nvidia is headquartered, the US Department of Justice also launched two antitrust investigations into Nvidia in August 2024. It can be seen that Nvidia is simultaneously facing antitrust investigations from the US, the European Union, and China, so politics is not the only reason.

In fact, with a simple search, one can find that with the development of AI technology, Nvidia’s scale has been expanding rapidly in recent years. This year, in the global artificial intelligence chip market, Nvidia’s market share has reached 80 – 90%, occupying an absolute monopoly position and having a dominant say. For such an enterprise that dominates in a key technological field, an antitrust investigation is a natural consequence. Especially considering that Nvidia itself once cooperated with the US government to restrict the development of China’s technological development and immediately banned the sale of its high-end chips, which undoubtedly made countries around the world feel vigilant. Especially in the context of the rapid development of artificial intelligence technology, all countries regard AI as a key strategic area and have become increasingly sensitive to the management and control of relevant technologies and markets. France, which was the first to start investigating Nvidia, once imposed a fine of $44 billion on it. Behind this is the European Union’s fear of the overwhelming power of American tech giants, just like the huge fines imposed on Microsoft and Google by the European Union in the past.

As for the US itself, in fact, it is also worried that the dominance of a single company will lead to the loss of the government’s control over these tech giants. There has been speculation that the investigations by the US Department of Justice are “just an appetizer”. In the future, there has even been rumors that the US government is planning to dilute the equity of company executives like Jensen Huang and directly participate in the equity control of Nvidia. Controlling tech companies and curbing the development of China’s science and technology are the established policies of the US government in recent years. A company that dominates in an important field undoubtedly seriously threatens the US’s leading position in the technological field, even if this company is an American one.

Overall, the antitrust investigation conducted by China against Nvidia, a giant with more than half of the profits and market coming from China, is a normal response that any normal country would make when facing a dominant giant. However, the US’s act of using this as an excuse to announce sanctions against Chinese drone companies is clearly tying the economy to politics, which also reflects the US’s advantage and initiative in the China-US trade war and reflects the US’s fear of losing its dominant position in the international economic system. But the US itself also knows that when a company dominates, it will arouse the vigilance and investigation of governments of various countries. After the end of the Cold War, the US has dominated the world economic system for more than 30 years. How could this situation not trigger concerns among other countries? The US’s trade war against China is, in fact, exactly the same as the behavior of monopoly enterprises suppressing small companies. The reason given by the US Department of Justice for investigating Nvidia is that Nvidia has abused its dominant position to force other enterprises. But when the US itself conducts monopolistic oppression against other countries, who can investigate this world’s No.1 giant?