Shares of Nvidia fell Monday after China said it is investigating the high-flying U.S. microchip company over suspected violations of Chinese anti-monopoly laws.
In a brief news release with few details, Chinese regulators appear to be focusing on Nvidia’s $6.9 billion acquisition of network and data transmission company Mellanox in 2019.
Nvidia shares fell 2.6% Monday. They are still up 180% so far this year.
Considered a bellwether for artificial intelligence demand, Nvidia has led the AI sector to become one of the stock market’s biggest companies, as tech giants spend heavily on the company’s chips and data centers needed to train and operate their AI systems, Associated Press reports.
Nvidia’s shares have surged this year along with the California company’s revenue and profit due to AI demand. According to data firm FactSet, about 16% of Nvidia’s revenue comes from China, second only to its U.S.-generated revenue.
A spokesperson for the company based in Santa Clara, California, said in an emailed statement that Nvidia is “happy to answer any questions regulators may have about our business.”
