China rules that Nvidia violated its antitrust laws

A preliminary investigation by a Chinese regulatory body has concluded that Nvidia has breached the nation's antitrust laws. The State Administration for Market Regulation (SAMR) announced this finding regarding the leading chip manufacturer, citing non-compliance with the conditions set during Nvidia's acquisition of Mellanox Technologies, a supplier of networking products based in Israel and the US. The acquisition, which was approved by Beijing in 2020, is now under scrutiny as US and Chinese officials gear up for ongoing trade discussions in Madrid. These talks come at a critical juncture, with a temporary tariff agreement between the two global powers poised to end in November. According to sources familiar with the situation, SAMR's conclusion was reached weeks prior to the public announcement, suggesting that the timing was strategically chosen to bolster China’s position in the upcoming negotiations. The investigation into Nvidia began in December, shortly after the US imposed stricter export regulations on advanced semiconductor technology targeting China. During the months that followed, SAMR conducted interviews and gathered legal assessments to construct their case against Nvidia. The company had purchased Mellanox for $6.9 billion, a move that significantly enhanced its foothold in the data center and high-performance computing sectors, where Nvidia has since emerged as a leader. If the preliminary findings are upheld, Nvidia could face fines ranging from 1% to 10% of its sales from the previous year. Additionally, regulators may mandate changes to the company’s business practices that are deemed in violation of antitrust legislation.