Key points
- SAMR says a preliminary review found Nvidia violated China’s anti-monopoly law tied to conditions attached to its 2020 Mellanox acquisition; a full investigation is now underway.
- China approved the Mellanox deal with restrictive conditions in April 2020 (e.g., FRAND supply, no tying/bundling, nondiscrimination).
- Penalties under China’s AML can reach 1%–10% of the prior year’s sales; recent guidance allows fines to be assessed up to global revenues in some merger cases.
- Nvidia derived about $17B (≈13%) of FY2025 revenue from China, underscoring the stakes.
- Separate from the antitrust case, China’s cyberspace regulator ordered major firms to halt purchases of Nvidia chips, tightening the operating backdrop.
The latest
China’s State Administration for Market Regulation (SAMR) said a preliminary probe found violations related to Nvidia’s 2020 purchase of Mellanox and has escalated to a deeper investigation. The announcement landed as U.S.–China trade talks resumed, adding geopolitical weight to the case. Nvidia says it complies with laws and will cooperate.
Why Mellanox still matters
When China cleared the deal in April 2020, it did so with remedies aimed at preventing foreclosure in GPUs and high-speed networking, areas central to AI data centers.
Public summaries from legal trackers cite FRAND supply, no forced bundling/tying, and nondiscrimination among the commitments. The current probe tests whether Nvidia honored those conditions as its AI business surged.
What Nvidia faces
Under the Anti-Monopoly Law, SAMR can impose 1%–10% of the prior year’s sales and require behavioral remedies. Commentary on recent rule changes notes that, for certain merger-control breaches, fines may be calculated on global turnover, raising the ceiling if applied. Market reaction was negative on the headlines.
Bigger picture: tech rivalry and chip access
The probe unfolds alongside tighter Chinese directives on Nvidia chip purchases, notably orders to halt buying of the RTX Pro 6000D, intensifying pressure already created by U.S. export curbs. Nvidia’s workarounds (e.g., China-specific parts like H20) have kept a foothold, but policy risk remains high.
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