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Chinese regulators investigate NVIDIA for antitrust violations

Chinese regulators are investigating NVIDIA for breaching antitrust conditions related to its Mellanox acquisition amid rising US-China tech tensions.

Chinese regulators are scrutinising NVIDIA, a leading graphics chip maker and key artificial intelligence (AI) industry player, over possible antitrust violations. The investigation focuses on NVIDIAโ€™s 2020 acquisition of Mellanox Technologies, a computer networking company, and whether it adhered to conditions set by Chinese authorities at the time.

Mellanox deal raises compliance concerns

When NVIDIA purchased Mellanox Technologies, Chinese regulators approved the deal with specific requirements. One key condition was that NVIDIA had to share information about new Mellanox products with competitors within 90 days of making them available for its operations. Reports from Bloomberg suggest that Chinaโ€™s State Administration for Market Regulation believes this condition may have been breached, prompting the current investigation.

This isnโ€™t the first time NVIDIA has faced such scrutiny. In September 2024, the US Department of Justice opened an antitrust investigation into the company. However, the Chinese investigation occurs amid escalating tensions in the ongoing trade war between the US and China, giving it additional geopolitical weight.

Trade war fuels tech battles

The investigation comes amid increasing technological rivalry between the two nations. On December 1, the US Department of Commerce imposed export restrictions and sanctions on 140 Chinese companies involved in chipmaking. The measures also limited China-bound shipments of high-bandwidth memory chips, aiming to restrict Chinaโ€™s progress in advanced AI development.

China retaliated earlier this year by banning exports of key minerals, such as gallium, germanium, and antimony, which are critical for chip production. By targeting NVIDIA, China is striking at a company that has become central to the global AI boom.

NVIDIAโ€™s GPUs, such as the powerful H100, are widely used in training generative AI models. These chips have helped the company become one of the worldโ€™s most valuable firms. NVIDIAโ€™s revenue is also tied closely to China, with about 15% of its earnings coming from the region.

A critical moment for NVIDIA and the industry

The investigation into NVIDIA highlights the complexities of balancing business success with regulatory requirements, particularly in a politically charged environment. Any findings of non-compliance could have significant implications for NVIDIAโ€™s operations in China and its global standing.

As both nations continue to oppose each otherโ€™s technological ambitions, companies like NVIDIA find themselves caught in the crossfire. Whether this investigation leads to penalties, further restrictions, or a broader geopolitical statement remains to be seen. Still, it underscores how critical tech firms have become in the US-China rivalry.

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