On September 15, 2025, China’s State Administration for Market Regulation (SAMR) announced that a preliminary investigation found Nvidia, the leading American semiconductor company, to be in violation of Chinese anti-monopoly laws. This development revisits Nvidia’s 2020 acquisition of Mellanox Technologies, a major data center networking company, and marks a critical escalation in the tense trade relationship between the U.S. and China amid ongoing trade talks in Madrid.
Background of the Investigation
Nvidia completed its $6.9 billion acquisition of Mellanox Technologies in 2020, a deal that received conditional approval by Chinese regulators. The conditions were meant to prevent anti-competitive practices and ensure continued supply of key technologies in China. However, SAMR’s investigation, which began in December 2024, alleges that Nvidia failed to comply with those conditions, resulting in a violation of China’s anti-monopoly laws.
This investigation is part of China’s broader efforts to tighten regulatory oversight on U.S. tech firms amid rising geopolitical tensions and to protect its semiconductor industry from increasing U.S. export restrictions.
Timeline of Key Events
| Date | Event |
|---|---|
| 2020 | Nvidia completes $6.9 billion acquisition of Mellanox Technologies with China’s conditional approval. |
| December 2024 | China’s SAMR launches an investigation into Nvidia’s compliance with acquisition conditions. |
| September 15, 2025 | SAMR announces preliminary findings that Nvidia violated anti-monopoly laws and signals continued investigation. |
| September 15, 2025 | Amid the announcement, Nvidia’s stock drops approximately 2% in premarket trading. |
Impact on Nvidia and Broader Trade Relations
Nvidia reported approximately $17 billion in revenue from China in its fiscal year ending January 2025, accounting for 13% of its global sales. China’s anti-monopoly law allows fines from 1% to 10% of the previous year’s revenue for violations, suggesting potential financial repercussions for Nvidia.
Beyond monetary fines, Nvidia may be required to adjust its business practices in China, possibly restricting the use or sale of Mellanox components in the Chinese market. However, analysts view a complete ban on Nvidia’s GPU sales in China as unlikely for now.
This regulatory move by China came during sensitive U.S.-China trade talks focused heavily on semiconductor technology and export controls, with the timing seen by experts as strategic leverage by Beijing to strengthen its negotiation position.
Current Context in U.S.-China Tech Rivalry
This case exemplifies deeper tensions in the battle for technological dominance, especially in artificial intelligence (AI) chip markets where Nvidia is a leading global supplier. U.S. export restrictions on advanced chips to China and the resulting Chinese investigations of U.S. tech companies reflect a wider struggle for control over next-generation technologies.
China has also scrutinized domestic companies such as Tencent and ByteDance over technology transfers and purchase of Nvidia’s latest H20 AI chips, citing national data security concerns.
Nvidia’s China Revenue vs. Global Revenue (Fiscal Year Ending January 2025)
| Metric | Amount (USD Billions) | Percentage of Global Sales |
|---|---|---|
| China Revenue | 17 | 13% |
| Total Revenue | 130 (approximate) | 100% |
Potential Penalty Range Under China’s Anti-Monopoly Law
| Penalty Type | Percentage of Previous Year’s Revenue | Possible Penalty Range (USD Billions) |
|---|---|---|
| Fine | 1% to 10% | 0.17 to 1.7 |
| Business Restrictions | Varies | TBD |
Summary
China’s accusation that Nvidia breached anti-monopoly laws highlights the growing complexities and risks for U.S. tech companies operating in China. The ongoing investigation and potential penalties could impact Nvidia’s business operations, financial performance, and its role in the global semiconductor supply chain.
Amid intensifying U.S.-China rivalry in AI chip technology and trade, this probe reflects Beijing’s strategy to assert regulatory control while negotiating from a position of strength in global trade talks. The outcome remains to be seen, but the stakes are high for Nvidia, the semiconductor industry, and broader geopolitical relations.