Just go into the intricacies of this particular investigation regarding a deal made years ago.
Yeah, this was a bit of a surprise. We got this news last night from state television in China where CCTV disclosed that the agency SAMR has opened this probe into NVIDIA and what it calls

potentially anti-monopolistic behavior.
It's a little curious because, as you say, they're focused and they mentioned specifically a deal that they did four years ago to buy a company called Mellanox. It's a company in Israel that makes networking equipment.

China had to approve that deal when invited, decided to do it, and they did approve it, as you mentioned, in 2020.
But they did so with seven different conditions about anti-competitive behavior going forward that included giving customers in China access to product information for Mellanox and product

access for Nvidia's own chips.
Now, it's not exactly clear what they're going to dig into in this case, but as you noted, Nvidia has been this company at the heart of the US-China conflict over technology.

Washington has cut off its ability to sell its most advanced chips into China.
So they're really at the heart of this conflict between the two biggest economies in the world. Now, it's worth noting that the US Justice Department itself is looking for

information from NVIDIA regarding potentially violating antitrust laws. It's not the only country investigating Nvidia, but it sets the context of what other companies are being focused on in this tit-for-tat. Because Micron, for example, is having difficulty with its relationship with China.

This just seems to be around the context of China trying to one-up and respond to the U.S.'s limitations on technology in its country.

It's not just China; it's also the United States. France is also taking a look at it. That's because they have essentially a monopoly, almost a 100% share, of the most advanced chips used to train AI models.

But you're exactly right. Also, there's this broader trade conflict that we've seen, creating all sorts of problems for companies between the U.S. and China. NVIDIA still sells a lot of chips into China; it sold more in the past.

But two years ago, we got news that Washington was going to cut off their ability to sell the most high-end AI chips used to train AI models. Those restrictions have been steadily tightened since then, so Nvidia has suffered because of that.

But it's beyond that, too. It's the chip equipment makers that have been restrained. ASML in Europe has been restrained from selling its most advanced gear. So, in response, Beijing has taken a number of actions; we're seeing them retaliate in certain ways,

where they cut off a couple of minerals that are very important to the chip industry and the defense industry in particular—gallium and germanium. So they're beginning to show that they also have some cards to play.

levers to pull in this broader trade conflict.

Nvidia Hit With China Probe in Tech War Escalation

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China's Anti-Monopoly Investigation of NVIDIA

SAMR in China opened an investigation into NVIDIA's potentially anti-monopolistic behavior.

The investigation focuses on NVIDIA's 2019 acquisition of Mellanox, an Israeli networking equipment company.

China approved the acquisition in 2020 with seven conditions regarding anti-competitive behavior.

NVIDIA is at the heart of the US-China technology conflict, with the US restricting sales of advanced chips to China.

The US Justice Department is also investigating NVIDIA for potential antitrust violations.

Broader Geopolitical Context and Retaliation

China's investigation is seen as a response to US restrictions on technology.

The investigation isn't limited to China; the US and France are also investigating.

NVIDIA holds a near-monopoly on advanced chips used for AI model training.

The broader US-China trade conflict impacts NVIDIA's chip sales to China.

US restrictions on high-end AI chips have negatively impacted NVIDIA's sales.

Restrictions on chip equipment makers like ASML have led to Chinese countermeasures.

China has restricted exports of gallium and germanium, crucial minerals for the chip and defense industries.