BEIJING (Reuters) -China said on Monday it has launched an investigation into Nvidia over suspected violations of the country's anti-monopoly law, a probe widely seen as a retaliatory shot against Washington's latest curbs on the Chinese chip sector.

The statement from the State Administration for Market Regulation announcing the probe did not elaborate on how the U.S. company, known for its artificial intelligence and gaming chips, might have violated China's anti-monopoly laws.

It said the U.S. chipmaker was also suspected of violating commitments it made during its acquisition of Israeli chip designer Mellanox Technologies, under terms outlined in the regulator's 2020 conditional approval of that deal.

The announcement is the latest salvo in a long-running trade war between China and the United States as the countries vie for technological superiority.

Last week, four of China's top industry associations issued a rare and coordinated response saying that Chinese companies should be wary of buying U.S. chips as they were "no longer safe" and should buy locally instead.

Nvidia's shares closed 2.5% lower on Monday. An Nvidia spokesperson said the company worked hard to "provide the best products we can in every region and honor our commitments everywhere we do business," adding that "we are happy to answer any questions regulators may have about our business".

TECHnalysis Research chief analyst Bob O'Donnell told Reuters that the probe is unlikely to have much of an impact on the company, particularly in the near term, because most of Nvidia's most advanced chips are already restricted from being sold into China.

The investigation comes after the U.S. last week launched its third crackdown in three years on China's semiconductor industry, which saw Washington curb exports to 140 companies, including chip equipment makers.

Shortly after Washington's announcement, Beijing banned exports to the United States of the critical minerals gallium, germanium and antimony.

Nvidia is one of many companies caught up in U.S.-China friction. U.S. sanctions in 2022 banned shipments of A100 and H100 AI chips to China, leading Nvidia to develop modified versions. These China-specific variants were later restricted under tightened U.S. controls in October 2023, prompting Nvidia to release another set of modified chips for the Chinese market.

"It's clear that the Chinese government is trying to react against recent restrictions from the U.S., but their ability to impact the U.S. semiconductor industry continues to decrease over time," O'Donnell said.

Nvidia dominated China's AI chip market with a more than 90% share before those curbs. However, it faces increasing competition from domestic rivals, chief among them being Huawei. China accounted for around 17% of Nvidia's revenue in the year to the end of January, sliding from 26% two years earlier.

In 2020, the company won a key approval from China for its acquisition of Mellanox Technologies, to the relief of investors who felt Sino-U.S. trade friction could complicate the process.

Nvidia and the merged entity were set multiple conditions, requiring them to supply GPU accelerators to the Chinese market on "fair, reasonable, and non-discriminatory" terms.

The companies must also provide customers and distributors the opportunity to purchase up to one year's inventory of Nvidia GPU accelerators and Mellanox networking equipment under these terms.

The conditions also prohibit forced product bundling, unreasonable trading terms, purchase restrictions and discriminatory treatment of customers who buy products separately.

The last time China launched an anti-monopoly probe into a high-profile foreign technology firm was in 2013, when it investigated Qualcomm's local subsidiary for overcharging and abusing its market position in wireless communication standards.

Qualcomm later agreed to pay a fine of $975 million, which was the largest China had ever handed out to a company at the time.