Topline
China’s top competition regulator on Monday said a preliminary investigation found chipmaker Nvidia was violating the country’s antitrust laws, in an announcement that could further inflame tensions between the U.S. and China at a time when officials from both countries are meeting to discuss a potential trade deal in Madrid.
Jensen Huang, CEO of Nvidia, speaks to journalists during a trip to China.
dpa/picture alliance via Getty Images
Key Facts
In a brief announcement, China’s State Administration for Market Regulation said it has determined after a “preliminary investigation” that Nvidia “has violated the Anti-Monopoly Law of the People’s Republic of China.”
The agency said the probe was opened after the chipmaking giant allegedly violated conditions outlined in the agency’s approval of its 2020 acquisition of networking devices maker Mellanox Technologies.
The regulator said it has decided to conduct “further investigation into the matter in accordance with the law,” without mentioning any timeline or additional details.
The antitrust regulator had first mentioned plans to investigate Nvidia’s $6.9 billion acquisition of Mellanox in December last year.
Nvidia’s shares are down more than 1.5% in premarket trading to $175.11 early on Monday.
Big Number
$17 billion. That is the amount of revenue Nvidia generated from China in its last fiscal year, which ended in January, around 13% of the company’s total sales. In May this year, Nvidia CEO Jensen Huang told the Stratechery Podcast that he estimates Nvidia could earn $15 billion from sales of its H20 AI chips to China.
What Do We Know About The U.s.-China Trade Talks?
The announcement of the expanded antitrust probe comes on the same day a U.S. contingent led by Treasury Secretary Scott Bessent is meeting with Chinese officials in Madrid for trade talks. Speaking to reporters ahead of Monday’s talks, Bessent said both sides are “very close” to an agreement regarding the fate of the social media platform TikTok, but Beijing’s approval of any such deal could be linked to its demands for trade concessions. “Our Chinese counterparts have come with a very aggressive ask. We will see if we can get there. At present, we are not willing to sacrifice national security for a social media app.” The deadline for TikTok to secure a U.S. buyer is set to expire on Wednesday, but Trump has indicated he may extend it once again. On Sunday, Trump told reporters, “We’re negotiating TikTok right now…We may let it die, or we may, I don’t know, it depends, up to China…It doesn’t matter too much. I’d like to do it for the kids that like it.”
What To Watch For
In recent months, President Donald Trump has threatened to retaliate against regulatory efforts by foreign countries targeting U.S. tech giants. Earlier this month, Trump attacked the European Union after it announced it was hitting Google with a $3.5 billion fine. In response, the president claimed on Truth Social that with this fine, the bloc was “effectively taking money that would otherwise go to American Investments and Jobs.”