Authorities claim NVIDIA violated Chinese anti-monopoly laws in relations to conditions of the 2020 Mellanox acquisition.
NVIDIA looks to be in a bit of legal hot water with Chinese regulators coming into this week. A preliminary probe found that NVIDIA’s 2020 acquisition of Israeli tech company Mellanox is in violation of anti-monopoly laws in the country, which could lead to penalties and further regulation of the company’s operations within China.
China’s State Administration for Market Regulation (SAMR) announced the preliminary findings of the NVIDIA probe this week, as reported by CNBC. In it early results, the SAMR stated that Nvidia violated anti-monopoly laws related to conditions set on NVIDIA’s acquisition of Mellanox in 2020. Mellanox is a company that handles solutions for data centers and servers. This announcement comes as the US and China are set to convene in Madrid, Spain for discussions on trade, which may be stressed by the ongoing investigation. China has also signaled it will continue to dig into NVIDIA’s business for additional potential violations in the probe.
Source: Google
NVIDIA has been caught in a number of tumultuous positions between China and the United States as tensions have escalated in economics between the two nations. Restrictions from the United States government forced NVIDIA to make additional investments for a license to export AI-powered chips to China earlier this year. Nonetheless, NVIDIA has strived to keep China as a major part of its customer base, proudly announcing during its last quarterly earnings call that it had attained licenses to bring its latest chips to China, with its stocks rising sharply on those potential sales in future quarters.
This latest action by Chinese authorities may further stress those potential sales, and it remains to be seen what the latest financial talks between China and the US will bring. As we continue to follow this story, stay tuned to the NVIDIA topic for more news and updates.