Nvidia shares were under pressure Monday after a Chinese regulator said it was investigating the chipmaker over possible violations to the country’s antimonopoly law.
Shares slipped about 2% before the bell.
The State Administration for Market Regulation opened an investigation into the chipmaker in relation to acquisition of Mellanox, the Chinese government said Monday.
“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,” according to a statement translated by CNBC.
Nvidia did not immediately respond to a request for comment.
The news comes as competition heats up between the U.S. and China over chipmaking capabilities, with the Biden administration last week announcing a final slew of curbs targeting semiconductor toolmakers.
The U.S. has amped up restrictions on chip sales to the second-largest economy in recent years, barring Nvidia and other key semiconductors from selling their most advanced AI chips in an effort to limit the country from strengthening its military. The company has worked to create new products to sell in China that abide by the U.S. regulations.
Shares of the AI chip darling have outperformed this year, rallying nearly 188% as investors ramp up bets on the sector more than two years after ChatGPT’s initial debut. Shares have also helped push the market the market to new highs, along with the broader technology sector.