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Nvidia faces US$1 billion fine if China probe finds violation of antitrust laws, experts say

The investigation into Nvidia’s previously-approved Mellanox acquisition marks the first time that China’s market regulator has opened the books on a closed deal

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The Nvidia logo is seen at an exhibition booth in Taiwan. Photo: Digitimes
Che Panin BeijingandAnn Caoin Shanghai
US artificial intelligence (AI) chip giant Nvidia could face a fine of up to US$1 billion under Beijing’s antitrust probe, which was widely seen as a retaliatory move against Washington’s escalated chip restrictions, according to experts.
The investigation will apply the country’s antimonopoly law to Nvidia’s 2019 acquisition of Israeli interconnect products and solutions provider Mellanox Technologies, according to a statement from China’s State Administration for Market Regulation on Monday.

China granted “conditional” approval for the deal in April 2020, noting that Nvidia agreed to supply its graphic processing unit (GPU) and connection products to the Chinese market based on “fair, reasonable, and non-discriminatory principles”, and that it would ensure their compatibility with other companies’ hardware.

However, Nvidia has restricted exports of its advanced GPUs to China to comply with US regulations, an act that displeased Beijing. The investigation into a previously-approved transaction marks the first time that China’s market regulator has opened the books on a closed deal.

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