China has accused semiconductor leader Nvidia of breaking the country’s antitrust rules. This increases the already tense trade relations between Beijing and Washington.
On Monday, the State Administration for Market Regulation (SAMR) said Nvidia’s 2020 purchase of Mellanox Technologies violated Chinese antitrust law.
The $7 billion deal gave Nvidia greater control over high-performance computing. Mellanox, an Israeli networking supplier, was seen as a strategic asset in global data center and AI markets.
Several international regulators approved the acquisition years ago. China, however, has chosen to revisit the case.
The regulator has not announced penalties; it said only that further investigation will continue.
Nvidia’s Response
Nvidia rejected any wrongdoing. In a statement, the company said: “We comply with the law in all respects.
We will continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets.”
Trade Talks
The timing is notable. U.S. and Chinese officials are currently meeting in Madrid to discuss tariffs.
The talks are not focused only on semiconductors, but access to Nvidia’s advanced AI chips remains a central issue.
The United States has imposed several export restrictions over the past year.
In January, the Biden administration introduced the AI Diffusion Rule, limiting the sale of advanced AI chips abroad.
The rule was repealed in May; however, the restrictions did not end there. In April, the Trump administration added new licensing rules for chip exports to China.
By July, sales were allowed again, but only under strict conditions. Soon after, Washington required companies selling chips to China to pay the U.S. government 15% of their revenue from those deals.
Also read: China is Getting Nvidia AI Chips Despite Ban
Nvidia’s Sales
These changing rules have left Nvidia in a difficult position. During its most recent earnings call, the company confirmed that none of its chips had cleared the U.S. export approval process.
At the same time, China has discouraged domestic firms from relying on Nvidia products. This is part of Beijing’s plan to strengthen its homegrown chip industry.
But replacing Nvidia’s technology will be challenging. For many years, the company’s chips are central to AI research, supercomputing, and advanced data centers worldwide.
