The Chinese government is looking into U.S. intel NVIDIA for allegedly hacked into Mellanox, a supplier of connection, in violation of its anti-monopoly laws.
On Monday, the State Administration for Market Regulation made a speech via China Central Television announcing the research, but it does not discuss the specifics of NVIDIA’s suspected violations.
The power approved NVIDIA’s$ 6.9 billion merger of Mellanox, an Israeli firm, in 2020 with certain situations. These aimed to prevent the technology giant from restricting competitors in the areas of GPU motion, personal packets tools, and high-speed Ethernet adapter.
Observe: EU Investigates NVIDIA Deal With Run: ai
According to Bloomberg, Mellanox was required to provide Chinese rivals with information about new items within 90 days of making them available to NVIDIA and offer them a chance to maintain their own products are suitable. Additionally, the terms for unreasonable trading terms, discrimination against customers who purchase products singly, and product bundling were prohibited.
A NVIDIA director told TechRepublic:” NVIDIA wins on significance, as reflected in our forecast benefits and value to customers, and clients can choose whatever option is best for them.
We work hard to deliver the best goods in every region and uphold our standards wherever we conduct business. We are happy to respond to any inquiries regulators might have regarding our business.
Latest shot fired in the U. S. China chip war
Just the most recent development in a long-running battle for dominance in the lucrative semiconductor market between the United States and China is the investigation. The leading manufacturer of artificial intelligence and gaming chips, NVIDIA, announced record revenues of$ 30 billion ( £24.7 billion ) in the second quarter of 2024.
The U. S. is keen to maintain its current sovereignty by blocking China from access to NVIDIA’s state-of-the-art hardware, which is crucial for running advanced AI models. In addition to financial motivations, the U. S. has also raised concerns about China developing AI for military purposes.
The United States implemented its first set of chip-related export controls in 2022 for semiconductor sales to Beijing, and NVIDIA was also prohibited from selling its most advanced chips to Chinese companies. In response, NVIDIA developed the China-specific A800 and H100 chips that were compliant with the new controls, enabling it to maintain customers in the country.
That same year, the U. S. passed the CHIPS Act, which provided needed semiconductor research investments and manufacturing incentives and reinforced America’s economy, national security, and supply. Additionally, it created a blueprint for a domestic AI Bill of Rights. Intel, TSMC, Texas Instruments, and Samsung — the world’s largest memory chipmaker — have all announced plans to build fabs in the U. S.
SEE: Global Chip Shortage: Everything You Need to Know
Then, in August 2023, China’s Ministry of Commerce enforced export controls on gallium and germanium-related items” to safeguard national security and interests. ” These rare metals are essential in chip production, and China produces 98 % and 54 % of the world’s supply of gallium and germanium, respectively. The cost of the minerals has almost doubled in the year since, according to financial Times data.
In October last year, the U. S. imposed a second set of export restrictions on semiconductors, closing some of the loopholes NVIDIA exploited with A800 and H100. Since then, the chips industry has been preparing to release new iterations that defy the updated regulations.
Nevertheless, the restrictions have greatly impacted NVIDIA’s earnings in China. The country accounted for just 16.9 % of its revenue in 2023, 9.5 % less than in 2021, according to its latest financial results.
The Biden administration just announced its third set of restrictions on semiconductor exports to China just last week, extending the list of prohibited technologies. Beijing responded with a statement, declaring it a” typical act of economic coercion and non-market practice.”
” The US says one thing and does another, constantly generalizing the concept of national security, abusing export control measures, and implementing unilateral bullying,” the Ministry of Commerce spokesperson said”. China firmly opposes this.”
China responded by quickly enforcing a ban on the sale of germanium and gallium to the United States, closing the export controls that were in place by its 2023, and adding a number of Chinese defense technology startups that are unable to conduct business in China.
Quests for AI sovereignty surging worldwide
Not just the United States and China want to cut down on their reliance on other nations for AI chips. With the White House, Japan and the Netherlands have reached agreements limiting China’s purchase of chipmaking equipment.
In 2023, the U.K. thwarted the majority of license applications from businesses looking to export semiconductor technology to China. That same year, the U. K. government announced that it would devote £100 million ($ 126 million ) to fostering AI hardware development and shoring up possible computer chip shortages. Over the following five years, Amazon Web Services also announced plans to invest £8 billion in national data centers.
SEE: UK Government Announces £32m for AI Projects After Scrapping Funding for Supercomputers
With its European Chips Act, which was passed in July 2023, the European Union provided €43 billion ($ 46 billion ) in subsidies to boost its semiconductor sector. The bloc also has the lofty goal of producing 20 % of semiconductors by 2030.
Global antitrust investigations into NVIDIA
NVIDIA is having trouble influencing the China-U.S. chip wars. According to Bloomberg, the U.S. Justice Department is looking into whether the company violated antitrust laws by punishing customers who also purchase from its competitors and preventing customers from switching suppliers in addition to the Beijing investigation.
SEE: A global chip shortage could result from an AI surge by 2026.
Benoît CÅ“uré, the president of the French competition authority, has also said that NVIDIA may face antitrust charges in the country” one day “at a July press conference, Bloomberg has reported.
