China Finds Nvidia Violated Antitrust Law, Deepening Probe

Forbes reports that China's State Administration for Market Regulation (SAMR) announced on Monday that a preliminary investigation has concluded that U.S. chipmaker Nvidia violated the country's antitrust laws. The competition regulator stated that Nvidia "has violated the Anti-Monopoly Law of the People's Republic of China." Consequently, the agency will proceed with a "further investigation into the matter in accordance with the law," although no timeline or additional details were provided. This investigation stems from Nvidia's $6.9 billion acquisition of Mellanox Technologies in 2020. The SAMR alleges that Nvidia violated specific conditions stipulated in the approval of this acquisition. The Chinese antitrust body had initially indicated its intention to investigate the acquisition in December of the preceding year. The announcement prompted an immediate market reaction, with Nvidia's shares declining by over 1.5% to $175.11 in premarket trading. This development occurs concurrently with critical U.S.-China trade discussions, raising concerns about a potential escalation of bilateral tensions. U.S. Treasury Secretary Scott Bessent is currently leading a U.S. delegation in Madrid to engage with Chinese officials regarding potential trade agreements. Prior to these discussions, Bessent expressed optimism, suggesting that both nations were "very close" to reaching an agreement concerning the social media platform TikTok. China constitutes a significant market for Nvidia, generating $17 billion in revenue from the region in its last fiscal year, which concluded in January. This revenue accounted for approximately 13% of the company's total sales. Nvidia CEO Jensen Huang estimated in May that the company could potentially earn $15 billion solely from sales of its H20 AI chips to China. This regulatory action presents a significant strategic challenge for Nvidia within a key revenue-generating market.