China opens antimonopoly probe into Nvidia, escalating the chip war with the US

• China's top antimonopoly regulator is investigating Nvidia.
• The investigation is related to the company's 2020 acquisition of an Israeli chip firm.
• Nvidia's stock fell by 2.2% in premarket trading on Monday.

China's top antimonopoly regulator has launched an investigation into Nvidia, whose shares dropped by 2.2% in premarket trading on Monday following the latest escalation of chip tensions with the US.

The State Administration for Market Regulation said on Monday that it was investigating whether the chipmaker giant violated antimonopoly regulations.

The probe is related to Nvidia's acquisition of Mellanox Technologies, an Israeli chip firm, in 2020. China's competition authority approved the $7 billion takeover in 2020 on the condition that rivals be notified of new products within 90 days of allowing Nvidia access to them.

The US-China chip war has been escalating. Last week, China's commerce ministry said it would halt shipments of key materials needed for chip production to the US. The ministry said the measures were in response to US chip export bans, also announced last week.

Nvidia, which is headquartered in Santa Clara, California, has also faced antitrust scrutiny in the US. The Department of Justice has been examining whether Nvidia might have abused its market dominance to make it difficult for buyers to change suppliers.

Nvidia did not immediately respond to a request for comment from Business Insider made outside normal working hours.