16 December 2024

Why is China targeting Nvidia? (And why is the AI giant so important?)

Joel Mathis

China just escalated its so-called "chip war" with the United States: Beijing is launching an antitrust investigation of Nvidia, the American chipmaker whose products are powering the AI revolution.

The new investigation "may be seen as a retaliation" against recent U.S. moves to limit the sale of AI technology to China, said Axios. China has a "long history" of using antitrust investigations to retaliate against American regulations. One wrinkle: The U.S. government is "also reportedly investigating Nvidia" for possible antitrust violations, Axios said.

Still, the China investigation is being regarded as a "major escalation" of the chip war, said CNN. Both China and the United States see "AI dominance" as "crucial for national security." (The chips are crucial in "artificial intelligence, cyber warfare, military equipment" and other warfighting applications, said The Wall Street Journal.) Nvidia, meanwhile, is "the face of the AI tech revolution." Undermining the company could "harm the American company's ambitions" to continue its worldwide dominance of AI chipmaking. The two countries were already engaged in a series of tit-for-tat restrictions of chips and chip-making materials, CNN said. "The Nvidia investigation ups the ante."

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