China’s market watchdog says Nvidia ran afoul of the country’s anti-monopoly law tied to its 2020 purchase of Mellanox, and it’s taking the investigation to the next phase. Details were sparse — the regulator didn’t spell out exactly how Nvidia allegedly broke the rules — but it did say the company may have violated commitments made when Beijing conditionally approved the deal four years ago.
Nvidia shares dipped about 2% pre-market on the news.
The case lands right in the middle of US–China trade talks in Madrid and a fresh round of chip-sector skirmishes. Over the weekend, Beijing opened two other probes covering US semiconductors, while Washington keeps tightening — and sometimes tweaking — curbs on high-end AI hardware.
Why it matters: Under China’s antitrust law, fines can run 1%–10% of a company’s prior-year sales. Nvidia booked $17 billion of revenue in China in the fiscal year ended Jan. 26 — about 13% of its total — making any penalty and/or behavioral remedies worth watching.
Nvidia has been walking a geopolitical tightrope in China. Its tailored H20 chip designed to meet US export rules hit snags earlier this year, and Chinese authorities have pressed local firms to tread carefully. CEO Jensen Huang has repeatedly argued US companies should keep serving China’s fast-growing AI market, which he’s pegged at ~$50 billion within a few years.
For now, China’s regulator says the probe continues. Nvidia hasn’t publicly commented on the latest move.
Bloomberg, CNBC, the New York Times, the Financial Times, Reuters, and CNN contributed to this report.
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