A Chinese regulator has found Nvidia violated the country’s antitrust law, in a preliminary finding against the world’s most valuable chipmaker.
Nvidia had failed to fully comply with provisions outlined when it acquired Mellanox Technologies, an Israeli-US supplier of networking products, China’s State Administration for Market Regulation (SAMR) said on Monday. Beijing conditionally approved the US chipmaker’s acquisition of Mellanox in 2020.
Monday’s statement came as US and Chinese officials prepared for more talks in Madrid over trade, with a tariff truce between the world’s two largest economies set to expire in November.
SAMR reached its conclusion weeks before Monday’s announcement, according to two people with knowledge of the matter, adding that the regulator had released the statement now to give China greater leverage in the trade talks.
The regulator started the anti-monopoly investigation in December, a week after the US unveiled tougher export controls on advanced high-bandwidth memory chips and chipmaking equipment to the country.
SAMR then spent months interviewing relevant parties and gathering legal opinions to build the case, the people said.
Nvidia bought Mellanox for $6.9 billion in 2020, and the acquisition helped the chipmaker to step up into the data center and high-performance computing market where it is now a dominant player.
The preliminary findings against the chipmaker could result in fines of between 1 percent and 10 percent of the company’s previous year’s sales. Regulators can also force the company to change business practices that are considered in violation of antitrust laws.
