Sending a strong message against the new 10% tariff on Chinese goods implemented by the Trump administration, authorities from China have doubled down on their antimonopoly investigation against the US tech giants Nvidia and Alphabet.

China launched an initial probe against Nvidia in December after the US government, then under Biden’s executive rule, initiated its third crackdown in three years on China’s semiconductor industry. Washington effectively curbed exports to 140 Chinese companies, including chip equipment makers.

Now, the country has announced that it is carrying out an investigation into US government subsidies to its semiconductor makers, claiming they cause harm to the country’s mature-node chipmakers, according to the Chinese commerce ministry. Furthermore, China also announced that it would open an antimonopoly investigation into Alphabet, the parent company of Google, although authorities did not specify which of Google’s businesses would be targeted by the antitrust investigation.

Nvidia: a market leader in AI chips with lots to lose

According to the Financial Times, Nvidia made US$12 billion in sales in China in 2024 with its H20 chips, selling twice as many chips as domestic rival Huawei (which markets 910B model chips). While Nvidia is still the dominant player in China, it faces competition from Huawei, as well as from Baidu and Cambricon.

Moreover, Nvidia’s moat was also challenged by the US itself, which prohibited the company from commercializing its top-tier AI chips following several rounds of trade sanctions in 2022 and 2023. Analysts warn that if the investigation finds any breach of antitrust commitments, Nvidia could face hefty fines or be forced to alter its business practices in one of its most lucrative markets.

The antimonopoly probe will be the latest challenge for Nvidia, and it might be a tough one. For instance, Chinese e-commerce, cloud, and AI player Alibaba ended its legal troubles regarding its own antimonopoly investigation in late 2024; during that period, the company’s stock tanked, and its stock has not reached the 2021 peaks.

Google, banned in China

Although Chinese authorities did not offer any further details on the investigation or on what they alleged Google had done to breach the law, Google products, such as its search engine, remain blocked in China, even as the company works with local partners such as advertisers. Alphabet is also facing other antitrust legal battles elsewhere. The company is confronting its biggest challenge in decades as antitrust regulators on both sides of the Atlantic crack down on alleged anti-competitive practices that could result in break-up orders.

Furthermore, both Nvidia and Alphabet face a new opponent in DeepSeek. The Chinese lab DeepSeek AI launched an AI this year that can compete with Alphabet’s Gemini AI in performance while being very affordable, rendering Nvidia’s expensive chips less useful. DeepSeek reportedly trained its basic model, called V3, with a budget of US$5.58 million over two months. At the same time, big tech companies are spending tens of billions to train AI models with similar capabilities.