China’s State Administration for Market Regulation (SAMR) announced on Monday that a preliminary investigation has found U.S. chipmaker Nvidia in violation of the country’s anti-monopoly law. The regulator did not disclose specific details of the alleged violations but confirmed that the inquiry is ongoing, Reuters reported.
The probe, launched in December 2024, has been widely viewed as part of Beijing’s response to Washington’s curbs on China’s semiconductor sector. At the heart of the case are suspected breaches of commitments Nvidia made during its $6.9 billion acquisition of Israeli chip designer Mellanox Technologies in 2020, which was approved in China under conditional terms.
Nvidia, the world’s leading producer of artificial intelligence and high-performance gaming chips, has not yet commented on the regulator’s findings.
Under Chinese antitrust law, companies found in violation can face penalties ranging from 1% to 10% of their previous year’s revenue. Nvidia reported $17 billion in sales from China in the fiscal year ending January 26, representing 13% of its total revenue. Based on those figures, potential fines could reach into the billions. News of the preliminary finding sent Nvidia shares down 2% in pre-market trading on Monday.
The announcement coincides with U.S.-China trade talks in Madrid, where semiconductors are expected to be a central issue. Access to advanced AI chips has become one of the most contentious points in the escalating technological rivalry between Washington and Beijing.
Nvidia has been at the centre of this geopolitical struggle. Restrictions imposed under former President Donald Trump limited the company’s ability to sell its most advanced chips to China, although some measures were later relaxed. More recently, Chinese regulators have increased scrutiny of Nvidia’s H20 chip, a product designed specifically for the Chinese market to comply with U.S. export controls.
Last month, China’s cyberspace regulator summoned Nvidia representatives to address whether the H20 posed security risks, including potential backdoors that could compromise user data. Around the same time, major Chinese tech firms such as Tencent and ByteDance were called in by authorities to explain their purchases of the chip, amid growing concerns over reliance on U.S. technology.
With the latest step in the antitrust probe, Beijing is signaling its willingness to leverage competition law as part of a broader strategy to counter U.S. pressure, while accelerating efforts to build self-reliance in critical technologies.
