China to probe Nvidia for breaches of anti-monopoly law

China’s State Administration for Market Regulation (SAMR) has initiated an investigation into AI-GPU market leader Nvidia Corp.

A notice published by SAMR cites two reasons for the investigation.

One reason is Nvidia’s “suspected violation of the anti-monopoly law” although the notice published by the SAMR went in to no further detail. The second is related to Nvidia’s acquisition of Mellanox Technologies Co. Ltd. in 2020.

Nvidia agreed to buy Mellanox for US$6.9 billion in 2019 and the deal received approval from SAMR in 2020 with additional restrictive conditions after which the deal was successfully closed. SAMR appears to be announcing that approval is now subject to an anti-monopoly review.

China’s move comes after the third major tightening of restrictions on exports of semiconductor technology to China and is regarded as retaliatory by many observers.

Nvidia has been prevented from selling its most advanced AI-GPUs and AI systems to China by US export controls but it still relies on China for a significant part of its sales. Accoridng to Reuters China accounted for 17 percent of Nvidia’s sale for the year that ended in January 2024, down from 26 percent two years earlier.