NVIDIA Faces Scrutiny in China Over Alleged Anti-Monopoly Violations

On September 15, 2025, China's State Administration for Market Regulation (SAMR) announced preliminary findings indicating that NVIDIA Corporation violated the country's anti-monopoly laws. The investigation centers on NVIDIA's 2020 acquisition of Mellanox Technologies, an Israeli networking company, for $6.9 billion. SAMR alleges that NVIDIA failed to comply with conditions imposed during the approval of this deal. While specific violations were not detailed, the regulator indicated that the probe would continue.

This development coincides with ongoing U.S.-China trade talks in Madrid, highlighting escalating tensions in the semiconductor sector. Potential penalties for NVIDIA could include fines up to 10% of its previous year's sales in China.

Background on the Acquisition

In 2020, NVIDIA acquired Mellanox Technologies for $6.9 billion. The deal was approved by SAMR with specific conditions to prevent anti-competitive practices.

Details of the Allegations

SAMR's preliminary investigation suggests that NVIDIA breached China's Anti-Monopoly Law by not adhering to the commitments made during the acquisition's approval process. These commitments were designed to prevent NVIDIA from using its newly acquired networking arm to suppress Chinese competitors and to ensure interoperability with other vendors. The exact nature of the alleged violations has not been disclosed, but the regulator has escalated the case to a formal probe, which could result in significant fines and operational restrictions for NVIDIA in China.

Potential Penalties

Under China's anti-monopoly statute, companies found guilty of infringements may be fined between 1% and 10% of the revenue they generated in the previous year. For NVIDIA, this exposure is significant: China accounted for around $17 billion of sales in the fiscal year ending January 2025, roughly 13% of its global turnover.

Broader Implications

This development coincides with ongoing U.S.-China trade talks in Madrid, highlighting escalating tensions in the semiconductor sector. The probe into NVIDIA is part of a broader pattern of regulatory actions by China, which has also launched an anti-dumping investigation into certain analog IC chips imported from the U.S. and an anti-discrimination probe into U.S. government restrictions on China's chip sector.

NVIDIA's Response

NVIDIA CEO Jensen Huang expressed disappointment over increasing U.S. restrictions on chip exports to China, as well as recent regulatory actions from Beijing. Speaking in London, Huang acknowledged the evolving geopolitical tensions between the U.S. and China, particularly as the U.S. has blocked NVIDIA from exporting its most advanced AI chips to China. He emphasized NVIDIA's continued commitment to working with both governments and adapting to shifting international policies.

Market Impact

Following the announcement of the probe, NVIDIA's stock experienced a decline of approximately 2% in pre-market trading. This reflects investor concerns about the potential financial and operational repercussions of the investigation.

Historical Context

This is not the first time NVIDIA has faced regulatory scrutiny in China. In July 2025, Beijing summoned the company over security concerns about its H20 AI accelerators, claiming there were "serious security vulnerabilities" in NVIDIA's China-specific product line.

Conclusion

The ongoing investigation into NVIDIA's compliance with China's anti-monopoly laws underscores the complex and evolving landscape of international trade and technology regulation. As U.S.-China relations continue to be strained, particularly in the semiconductor sector, companies like NVIDIA must navigate a challenging environment to maintain their market positions.