China’s State Administration for Market Regulation has announced that NVIDIA Corp. has violated anti-monopoly rules. This accusation is tied to its 2020 acquisition of Mellanox Technologies Ltd. Regulators concluded a preliminary investigation into the $7 billion deal, saying NVIDIA failed to comply with conditions that barred discrimination against Chinese firms.
The decision adds new pressure on US-China relations and the chipmaking giant, whose shares dropped nearly 1% in trading after the ruling. Beijing’s move comes as Chinese officials and the United States continue sensitive negotiations over tariffs and technology access in Madrid.
NVIDIA had secured Chinese approval for the Mellanox deal four years ago under strict conditions. The company has since become central to global artificial intelligence development, with its advanced chips powering services across leading technology platforms.
The decision is in line with broader trade tensions between Washington and Beijing. Over the weekend, China declared an anti-dumping investigation into semiconductor manufacturing by US firms, including Texas Instruments Inc. The company’s share price fell 4.7% on the news.
On Monday, US President Donald Trump confirmed plans to speak with Chinese President Xi Jinping at the end of the week. Treasury Secretary Scott Bessent acknowledged that officials had raised concerns over the timing of China’s investigation but emphasized that discussions covered a broader range of economic issues. Talks in Madrid spanned nearly six hours on the first day, touching on tariffs, TikTok, and market access.
Previously, the US had placed export bans on the most advanced AI chips made by NVIDIA for security reasons. NVIDIA also modified its chip designs to comply with the regulations, which could potentially lead to some sales in China. Recently, the Trump administration allowed NVIDIA and Advanced Micro Devices to sell certain AI products, while Beijing urged local agencies to avoid NVIDIA’s H20 accelerator.
China’s regulator has not specified remedies for the alleged violations, and the investigation into NVIDIA remains open. The company has not issued a public statement in response to the ruling.
The announcement comes at a time when ByteDance Ltd.’s TikTok app also faces an impending US deadline for compliance measures. Officials in both countries are expected to use the Madrid meetings to prepare for a possible Trump-Xi summit in South Korea in October.
NVIDIA’s role in global artificial intelligence development ensures its position remains at the center of trade disputes. With Washington restricting chip exports and Beijing intensifying regulatory actions, the company faces growing challenges in one of its most important markets.