- China accuses Nvidia of breaching antitrust rules over its Mellanox acquisition.
- The probe coincides with rising U.S.–China tech tensions and chip trade disputes.
- Nvidia’s market access in China faces new uncertainty despite recent deals.
China’s market regulator has accused U.S. chip giant Nvidia of violating the country’s anti-monopoly law, escalating tensions between the world’s two largest economies. The preliminary findings by the State Administration for Market Regulation (SAMR) could complicate ongoing trade talks between Chinese and U.S. officials in Madrid.
Beijing Flags Breach Over Mellanox Deal
The SAMR launched its investigation late last year, focusing on Nvidia’s 2020 acquisition of Israeli data-center networking firm Mellanox. The $7 billion deal had previously been approved by China with specific conditions. Regulators now say Nvidia breached those conditions, though they have not yet detailed how. Nvidia shares slipped around 2% in premarket trading after the news broke.
Geopolitical Friction Fuels Scrutiny
The probe into Nvidia comes as Beijing ramps up its broader scrutiny of U.S. semiconductor activity. Over the weekend, China opened two other investigations—one examining potential dumping of American chips into the Chinese market, and another targeting alleged U.S. discrimination against China’s chip industry. The timing suggests Beijing is leveraging regulatory pressure as technology tensions with Washington deepen.
Nvidia’s Strained China Ties
Nvidia has struggled to maintain its foothold in China amid tightening U.S. export restrictions. Its H20 chip, designed to meet U.S. rules, was blocked from shipment to China earlier this year. CEO Jensen Huang has warned that if American firms are sidelined, domestic rivals like Huawei could dominate China’s fast-growing AI market, which he estimates could reach $50 billion within three years.
To preserve market access, Nvidia recently struck a deal with Washington allowing it to resume sales to China in exchange for ceding 15% of that revenue to the U.S. government. The company is also in talks about exporting a more advanced chip to China, though those discussions now face new uncertainty.
Also Read: China’s $8B AI Strategy: How Lean, Practical Investments Are Challenging U.S. Tech
China’s antitrust probe adds another layer of risk for Nvidia at a time when its global strategy hinges on navigating political fault lines. How regulators proceed could shape not only Nvidia’s future in China but also the broader tech relationship between Washington and Beijing.
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