China says Nvidia violated anti-monopoly law after prelimina

KEY POINTS

• Chinas market regulator on Monday said that Nvidia violated the countrys anti-monopoly law in relation to its aquisition of Mellanox in 2020.
• Shares of Nvidia were down around 2% in pre-market trade.

• Chinas market regulator on Monday said that Nvidia violated the countrys anti-monopoly law, according to a preliminary probe, adding that Beijing would continue its investigation into the U.S. chip giant.

  Shares of Nvidia were down around 2% in premarket trading.

• Late last year, Chinas State Administration for Market Regulation (SAMR) opened an investigation into Nvidia in relation to the acquisition of Mellanox and some agreements made during the acquisition. Nvidia acquired the Israeli technology company that creates network solutions for data centers and servers in 2020, in a deal that was approved by China at the time with certain conditions.

  In a preliminary investigation, the SAMR said Nvidia had violated Chinas anti-monopoly laws in relation to that acquisition and its conditions. Chinas market regulator did not specify how Nvidia allegedly breached the countrys laws.

• The update from the SAMR has the potential to complicate trade talks between Chinese and U.S. officials thatbegan on Sunday in Madrid, Spain.

  Tensions between Beijing and Washington appear to be on the rise on the technology front. China opened two separate probes into semiconductors on Saturday: one is an anti-dumping investigation into certain chips imported from the U.S., while the other is an anti-discrimination scrutiny of U.S. restrictions on Chinas chip industry.

• More recently, Nvidia has had a tumultuous relationship with the Chinese market as the company has been caught up in geopolitics. Earlier this year, Nvidias H20 product, a chip that had been specially designed to comply with U.S. export restrictions, was blocked from being sent to China.

  Nvidia CEO Jensen Huang has publicly called for American firms to be allowed to sell to China, saying the artificial intelligence market there will likely reach about $50 billion in the next two to three years. Huang