The artificial intelligence (AI) industry is in tension. On one hand, there is huge demand for software, which is driving investment. But this optimism has been tempered by the simmering trade war between the US and China.
Last week, the Chinese opened an antitrust probe into Nvidia (US:NVDA) over the chip company’s acquisition of Israeli networking business Mellanox in 2020. The accusation that Nvidia might have a monopoly is not unfounded, but the timing, just before protectionist president-elect Donald Trump enters office, suggests political motivations.
The US has already put sanctions on China, which has prevented Nvidia from selling its most advanced AI chips to Chinese businesses. Despite this, China still makes up 15 per cent of Nvidia’s business and last quarter increased sales by 33 per cent year on year to $5.4bn. So, Nvidia being totally cut off from the Chinese market would still be a significant blow.