China accuses NVIDIA of violating anti-monopoly laws
China believes NVIDIA's acquisition of Mellanox violates antitrust laws, raising new tensions in US-China trade relations.
SAMR's initial investigation results
China's State Administration for Market Regulation (SAMR) has just announced preliminary results related to NVIDIA's $6.9 billion acquisition of Mellanox.
Accordingly, SAMR believes that the company violated anti-monopoly regulations as well as the conditions set by China when approving this deal in 2020. However, no penalty has been issued yet as the investigation continues.
According to the Financial Post, SAMR actually completed its conclusions several weeks ago but delayed the announcement. This move is believed to be aimed at giving China more leverage in the ongoing trade negotiations with the US in Madrid. The accusation against NVIDIA comes at a time when the two countries are looking for a new agreement, including issues related to TikTok.
Recent tensions over chips
When it approved the deal in April 2020, China required NVIDIA to continue supplying GPUs and connectivity products to the domestic market, while adhering to the principle of “fairness, reasonableness and non-discrimination,” which is seen as a condition to ensure Chinese companies still have access to technology after the acquisition.
Last month, it was reported that China had advised domestic companies to limit purchases of NVIDIA’s H20 chips due to a national security review, partly due to comments by US Commerce Secretary Howard Lutnick, who said that even if the US allowed NVIDIA to sell chips again after a three-month suspension, China would still not be able to access the most advanced technology.
Lutnick stressed that Washington wants to keep a technological distance from Beijing, providing only lower-end products so that Chinese developers are “dependent” on the US hardware and software ecosystem. This further increases tensions around NVIDIA's position in the global market.
