The Chinese government is investigating whether Nvidia may be violating anti-monopoly laws. The move follows export and trade restrictions announced in recent weeks.
The investigation focuses on the acquisition of Mellanox and Nvidia’s recent behavior. Mellanox was acquired in 2019 for $7 billion, giving Nvidia a company that was advanced in high-performance chips for supercomputers. The Chinese government approved the acquisition at the time, with conditions and commitments from Nvidia.
For example, Nvidia and Mellanox promised to share information about new products with competitors within 90 days of release. In addition, Nvidia agreed to let Chinese chipmakers test their products with Mellanox technology to ensure they work properly. According to a statement from the Chinese government, Nvidia is now suspected of failing to honor these commitments.
Nvidia has not yet responded to China’s official investigation. However, the market considers the investigation very serious; at the time of writing, Nvidia shares had fallen in value by about 2.5 percent.
Mounting tension
The economic conflict between the United States, Nvidia’s home base, and China has escalated recently. The U.S. is trying to use sanctions to slow China’s technological progress in chip development and prevent China from accessing Nvidia’s advanced chips. In response, China announced last week that it would restrict the export of materials for high-tech applications.