China Opens Investigation Into Nvidia Over Potential Antitrust Violations

China’s antimonopoly regulator announced on Monday that it was investigating potential violations of antitrust law by Nvidia, the American company that makes the vast majority of the computer chips that power artificial intelligence systems.

The probe, a rare move by Beijing, comes a week after the Biden administration expanded curbs on the sale of advanced American technology to China. In response, the Chinese government last week announced it would ban the export of several rare minerals to the United States and imposed sanctions on more than a dozen U.S. defense firms and defense industry executives.

Together, the moves by Beijing signal its willingness to engage in supply chain warfare as the policy contest over trade and the control of technology escalates between the world’s two largest economies.

The battle has made A.I. chips into one of the world’s most sought-after technologies, and Nvidia has cornered the market, accounting for 90 percent of global sales by the end of last year. Nvidia’s dominance helped it become one of the most valuable companies in the world over the past year.

China’s State Administration for Market Regulation said on Monday that it was investigating Nvidia for violating commitments made during its acquisition of Mellanox Technologies, a company that makes computer networking equipment. The Chinese regulator approved Nvidia’s acquisition of the company in 2020 with conditions to prevent anti-competitive practices and ensure supplies to China.

Nvidia did not immediately respond to a request for comment about Monday’s announcement.

As the Biden administration has progressively tightened restrictions on Nvidia’s chip sales to China, Nvidia had responded by offering less powerful versions of