China's State Administration for Market Regulation has found that Nvidia, a US-based chip manufacturer, violated the country's antitrust regulations, according to a preliminary investigation. This decision comes as trade talks between China and the US entered their second day in Madrid. The investigation, which began in December, centers on Nvidia's $6.9 billion acquisition of Mellanox Technologies in 2019 and potential anti-monopoly violations.
The specifics of the alleged violations have not been disclosed, and China's market regulator will conduct further investigations into the matter. Nvidia could face fines of 1-10% of its annual sales in China, which was $17 billion in the last fiscal year. Analysts believe the ruling may not significantly affect Nvidia's bottom line but could complicate its sales of advanced chips in China.
The announcement coincides with ongoing trade talks between the US and China, focusing on issues like tariffs and national security. The US and China are engaged in a contest for supremacy in the semiconductor industry, with China tightening scrutiny of the US chip industry. Nvidia's shares fell 2.1% in pre-market trading following the announcement.
This development highlights the complex and often tense relationship between the US and China in the tech industry, particularly in the semiconductor sector. As trade talks continue, the outcome of this investigation could have significant implications for Nvidia and the broader industry.
