Chinese regulators have launched an antitrust investigation into Nvidia, the world's top chipmaker, accusing the US-based company of breaking rules tied to its $6.9 billion purchase of Mellanox Technologies in 2020.
The State Administration for Market Regulation (SAMR) announced Monday that a preliminary review found Nvidia may have failed to follow conditions set when it acquired the Israeli networking firm.
China had only approved the deal under strict rules, including promises to keep supplying Mellanox-related products to Chinese companies, AP reported.
"The case will now enter deeper investigation," SAMR said in a brief statement. The agency did not say what parts of the agreement were violated or what penalties Nvidia might face.
A spokesperson for Nvidia responded, "We comply with the law in all respects and will continue to work with the authorities."
This marks a serious turn for Nvidia, especially as it's already facing export limits from the United States.
If China finds the company guilty of breaching antitrust laws, Nvidia could be fined up to 10% of its Chinese sales revenue, which totaled around $17 billion last year.
That could mean a fine worth billions of dollars, though no decision has been made yet.
China says Nvidia violated anti-monopoly law | Probe over Mellanox deal commitments
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Beijing Targets Nvidia as Chip Dispute Grows
SAMR first began looking into Nvidia's conduct back in December 2024, focusing on whether it upheld its promises following the Mellanox takeover.
Monday's announcement confirms regulators believe there is enough evidence to move forward.
The timing is notable. Chinese and US trade officials just wrapped up talks in Madrid, where tech issues like semiconductors were key topics.
During the meetings, US Treasury Secretary Scott Bessent said the two countries reached a framework deal on US ownership of TikTok — though China hasn't confirmed that.
Meanwhile, tensions around chip exports continue to rise. Just days before, China's Commerce Ministry launched new probes into American-made analog chips and announced a separate investigation into what it called discriminatory US trade actions against China's chip sector.
According to TechPortal, China is also reportedly urging its companies to avoid Nvidia's new H20 AI chips, especially in government-linked projects.
Officials have even asked state-run and private firms to explain their decision-making if they choose Nvidia over local chipmakers.
Nvidia, based in Santa Clara, California, is a central player in the US-China tech conflict. The company recently took a $5 billion hit in unsold inventory and lost $2.5 billion in potential sales due to ongoing US export restrictions.
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