China has launched an investigation into the US computer chip maker Nvidia for allegedly violating its anti-monopoly laws, in the latest move in the battle between the two countries over the lucrative semiconductor market.

The announcement follows Washington’s recent decision to further restrict sales to companies in China’s semi-conductor industry.

US President Joe Biden has tightened restrictions around the sale of advanced technology to China, with the clash over exports expected to continue when Donald Trump re-enters the White House.

The price of shares in Nvidia dipped following the news. The company did not immediately respond to the BBC’s request for comment.

Founded in 1993, Nvidia was originally known for making the type of computer chips that process graphics, particularly for computer games.

The tech giant now stands at the forefront of the development of chips that power artificial intelligence (AI).

But on Monday, Chinese state broadcaster CCTV said that authorities in Beijing had launched a probe “in accordance with the law”.

Nvidia has also been accused of violating commitments made in 2020 when it acquired Mellanox Technologies.

It comes after a fresh crackdown by the US last week, which saw restrictions on sales to 140 companies including Chinese chip firms such as Piotech and SiCarrier without special permission.

The countries have been locked in a race to establish market dominance in high-end chips.

It has become a source of geopolitical tension, although US tech giant Nvidia has seen its shares surge over the past year.

While the announcement on Monday saw Nvidia’s shares fall some 2% in pre-market trading, it is still one of the most valuable companies in the world.

It is, however, facing increasing competition from rivals such as AMD and Intel.