China: Antitrust authority accuses Nvidia of violating merger conditions
A Chinese preliminary investigation is said to incriminate Nvidia. Now comes a comprehensive investigation into the billion-euro Mellanox takeover.
Nvidia is happy to sell entire servers including network technology, but is not allowed to deliver many of them to China.
(Image: Nvidia)
Nvidia is said to have violated the requirements of the Chinese antitrust authority. This was announced by the State Administration for Market Regulation (SAMR) in a short press release. A preliminary investigation that began in December 2024 was found to be against Nvidia; a comprehensive investigation is now underway.
It concerns the acquisition of network specialist Mellanox in 2020 for seven billion US dollars. At the time, China agreed to the takeover subject to conditions, without making these public in detail.
Discrimination against China
According to the Bloomberg News agency, the antitrust authority assumed that Nvidia was not allowed to discriminate against Chinese companies. The investigation could be related to the export restrictions imposed by the US government: Nvidia is not allowed to sell many AI accelerators to China due to US laws. The US argues that China would use the accelerators for military purposes.
The export ban includes Nvidia's own servers, which contain Mellanox's network technology – the GPU and network divisions are now closely interwoven. For example, Mellanox has developed the Infiniband interconnect, which is widely used in supercomputers and connects numerous server boards. Nvidia now offers a number of switches and network processors. In the last quarter alone, Nvidia generated sales of almost 7.3 billion US dollars with network technology.
Depending on the argument, the situation could be interpreted to mean that Nvidia is being forced to discriminate, as are other chip companies such as AMD.
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Further investigations against US companies
The Chinese Ministry of Commerce has also recently launched a so-called anti-dumping investigation against US chip manufacturers such as Broadcom, Texas Instrument (TI) and Analog Devices. They produce all kinds of controllers and analogue circuits using older manufacturing technology – the bread-and-butter business of many Chinese manufacturers. US chips could therefore have led to illegal price competition in China. Punitive tariffs to strengthen Chinese manufacturers are on the table.
The Chinese and US governments are currently negotiating in Madrid on contentious issues. The focus there is on reciprocal tariffs.
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