China’s State Administration for Market Regulation (SAMR) announced on Monday that a preliminary investigation has found that Nvidia violated the country’s anti-monopoly law.
The probe is focused on Nvidia’s 2020 acquisition of networking solutions company Mellanox and the conditions attached to that deal. Nvidia’s shares fell about 2% in premarket trading following the news.
Details of the investigation
SAMR began its investigation into Nvidia late last year, examining the company’s compliance with conditions imposed when Chinese authorities approved the Mellanox acquisition in 2020. While the regulator did not specify the exact nature of the violations, it stated that its preliminary findings show Nvidia breached anti-monopoly rules related to the deal. A full investigation will now proceed.
Nvidia did not immediately respond to requests for comments from multiple news outlets.
Investigation comes amid escalating U.S.-China tech tensions
The announcement coincides with ongoing trade discussions between U.S. and Chinese officials in Madrid and adds to the growing friction in the technology sector.
On Saturday, China initiated two separate semiconductor investigations targeting U.S. practices: an anti-dumping probe into certain imported chips and an anti-discrimination review of U.S. restrictions on China’s access to advanced technology.
Nvidia has been directly affected by these tensions. Earlier this year, its H20 chip, which was specifically designed to comply with U.S. export controls, was blocked from being shipped to China. CEO Jensen Huang has publicly argued for U.S. companies to be allowed to sell in China, warning that restrictions could cede a market projected to be worth $50 billion to domestic firms like Huawei.
Last month, Huang’s lobbying efforts resulted in an agreement with Washington that allows Nvidia to resume some chip sales to China. As part of the deal, Nvidia must give 15% of the revenue from these sales to the U.S. government. Negotiations are ongoing regarding the potential export of more advanced chips to the Chinese market.
