Nvidia allegedly breached anti-monopoly regulations, prompting a comprehensive investigation's expansion in China, according to official statements.
In a move that could potentially impact the tech giant, Nvidia Corporation, the California-based AI powerhouse, is under investigation by China's top market watchdog, the State Administration for Market Regulation (SAMR). The investigation was launched in December of the previous year and follows ongoing trade talks between Beijing and Washington.
According to China's antitrust law, companies found guilty of antitrust violations can face fines of between 1 and 10 percent of their annual sales from the previous year. The SAMR has determined that Nvidia has violated the Anti-Monopoly Law of the People's Republic of China, but the statement did not provide further details about the alleged legal contraventions or the further probe.
The investigation centres around Nvidia's acquisition of Israeli chip designer Mellanox Technologies Ltd. The SAMR suspects that the company contravened commitments made during the acquisition, as outlined in the 2020 conditional approval of that deal.
For Nvidia, China is a significant market. In the fiscal year ending on Jan. 26, China generated US$17 billion in revenue for the company, accounting for 13 percent of total sales. The announcement was made by the SAMR in Beijing, China.
The investigation into Nvidia by the SAMR is taking place after trade talks between Beijing and Washington entered a second day in Madrid. The trade talks are ongoing, and there is no publicly available information specifying the exact date when the further investigation of the SAMR against Nvidia Corporation will be concluded.
Additional reporting for this article was done by Reuters. The investigation comes amidst a wider context of tensions between the US and China, with Washington imposing curbs on the Chinese chip sector. The investigation into Nvidia by the SAMR was widely seen as a retaliatory shot against these measures.
As the investigation unfolds, Nvidia will be closely watching developments in China, a crucial market for its business. The company has yet to issue a formal response to the SAMR's investigation.
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