- China’s market regulator (SAMR) has launched a probe into Nvidia
- It alludes to violations of agreements made during the Mellanox acquisition
- Nvidia shares are down 2-3%, the company has not yet responded
China’s State Administration for Market Regulation (SAMR) has accused Nvidia of violating an anti-monopoly law, launching a preliminary probe into the US tech giant.
The violations allege that Nvidia has broken commitments made in 2020 when it acquired Mellanox Technologies for $6.9 billion, however details of the violations have not been shared.
If found guilty, Nvidia could face a fine worth between 1% and 10% of its prior year sales in a market that’s hugely important to it (accounting for around 13% of its total revenue last fiscal year).
Nvidia could be in trouble in China
The news comes as the US and China prepare for trade talks in Madrid, with chips expected to be central to discussions. China has also launched a discrimination investigation into US chip restrictions, questioning Tencent and ByteDance over their Nvidia H20 chip purchases.
“Recently, after preliminary investigation, Nvidia violated the Antimonopoly Law of the People’s Republic of China and the Announcement of the General Administration of Market Supervision on the Anti-monopoly Review Decision on the Approval of NVIDIA’s Acquisition of the Equity of Mylos Technology Co., Ltd. under Additional Restrictions, and the General Administration of Market Supervision decided to conduct further investigation into it in accordance with the law,” SAMR shared (translated).
Despite ongoing geopolitical tensions between China and the US, Nvidia CEO Jensen Huang has previously advocated for continued chip sales to China, warning that Chinese firms like Huawei could fill the gap and cost the US billions in trade.
As a result, Nvidia has secured a deal with the US government to resume sales to China, at the cost of 15% of its revenue. China-specific H20 chips are still believed to be off sale, but scaled-down Blackwell chips could be approved. The company generated $17 billion in revenue from China alone last fiscal year.
Nvidia shares dropped 2-3% in pre-market trading following the SAMR announcement. TechRadar Pro has asked Nvidia for a comment, but we did not receive an immediate response.
