China finds US chip giant Nvidia violated anti-monopoly law

China’s antitrust regulator said on Monday it found Nvidia in violation of the country’s anti-monopoly law and would proceed with further investigation, which could lead to punitive actions against the American chipmaker amid escalating technology rivalry with the US.

The State Administration for Market Regulation (SAMR) said in a one-line statement that Nvidia violated both antitrust laws and the Chinese government’s terms of approval for the company’s acquisition of Israeli interconnect solutions provider Mellanox Technologies in 2019.

The SAMR initiated its investigation into Nvidia in December over the US$6.9 billion deal, which received conditional approval from China in April 2020. The approval stipulated that Nvidia must continue supplying its graphics processing units and interconnect products to China under “fair, reasonable, and non-discriminatory principles” while ensuring compatibility with other companies’ hardware.

The regulator said on Monday that its probe would continue, without providing further details.

Nvidia did not immediately respond to a request for comment.

The investigation was “part of the broader tug of war in US-China trade talks”, said Fei Zhichao, a semiconductor analyst at Longbridge Securities.