China Says Nvidia Violated Antitrust Regulations

Trade tensions between China and the U.S. regarding semiconductors have escalated further.

On Monday, China’s State Administration for Market Regulation ruled that semiconductor giant Nvidia violated the country’s antitrust regulations, as first reported by Bloomberg. The ruling refers to Nvidia’s 2020 acquisition of Mellanox Technologies, a computer networking supplier, for $7 billion.

An Nvidia spokesperson said,
"We comply with the law in all respects. We will continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets."

China has not announced any consequences tied to its findings and will continue to investigate. Nevertheless, the ruling is expected to impact ongoing tariff negotiations between the U.S. and China, currently taking place in Madrid. While these discussions are not specifically about semiconductors, Chinese access to Nvidia chips remains a key point of contention.

Earlier this year, the outgoing Biden administration announced the AI Diffusion Rule, designed to restrict U.S.-made AI chips to certain countries, with specific limitations for China and other adversaries. Although the U.S. Department of Commerce formally repealed this rule in May, the future of AI chip exports to China remains uncertain.

Under the Trump administration, licensing agreements were imposed on chips heading to China in April, only to be reversed in July, allowing companies to resume sales. Shortly after, China introduced a deal requiring companies selling chips to the country to give the U.S. a 15% cut of the revenue from those sales. China has since discouraged firms from purchasing Nvidia chips, and as of a recent earnings call, none of Nvidia’s chips have cleared the new export process.