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China Probes Nvidia Over Mellanox Deal Amid AI Chip Monopoly Concerns

Dec 10, 2024, 08:47 AM

China's market regulators have launched an antitrust investigation into U.S. chipmaker Nvidia over suspected antimonopoly violations related to its 2020 acquisition of Israeli networking company Mellanox Technologies. The probe focuses on Nvidia's dominance in AI chips, where it holds a 90% market share, and its bundling of InfiniBand technology with its AI chips. The investigation comes a week after the U.S. imposed additional export controls on China's access to high-end semiconductors, escalating tensions in the ongoing US-China tech war. The move is seen by some analysts as retaliation for the U.S. export restrictions. Nvidia, which derives approximately 17% of its revenue from China and 44% from the U.S. in 2024, stated that it is willing to answer any questions regulators may have about its business. If violations are found, Nvidia could face a fine of up to $1 billion. This marks the first time China's market regulator has reopened a previously closed deal. Nvidia's shares fell by 2.5% following the announcement of the investigation.