Source: Sharecast
According to multiple reports, the State Administration for Market Regulation said Nvidia - a market leader in AI and gaming chips - had violated anti-monopoly laws, although it did not specify how, when it acquired Mellanox Technologies in 2020.
Beijing conditionally approved the deal at the time.
The brief statement, which saw Nvidia’s shares fall 2% in pre-market trading, comes head of trade talks between US and Chinese officials in Madrid.
China was hit especially hard by Donald Trump’s sweeping tariff regime. Beijing responded with its own stringent levies, prompting the US president to hike tariffs even further.
A 90-day truce was struck in May, with China agreeing to lower duties to 10% from 125%, and the US cutting levies to 30% from 145%. The ceasefire was extended in August but is due to expire November.
Nvidia acquired Mellanox, a specialist in networking products, for $6.9bn. The deal supported the chipmaker’s positioning in the data centre and higher-performance computing market, which it now dominates.
China is one of its largest and fastest-growing overseas markets, generating revenues of $17bn in the year to January end, around 13% of total sales.
Chips, however, are a key element of the trade war between the two economies, as both sides look to dominate the burgeoning AI sector.
Beijing is also keen to end a reliance on US chips and bolster its home-grown semiconductor industry.
The SAMR first started looking at the Mellanox deal in December.
Under China’s antitrust laws, companies can face fines of between 1% and 10% of annual sales.
Nvidia has so far yet to comment.