Nvidia’s position as the leading provider of artificial intelligence chips has put it in the crossfire of the US and China’s battle for tech supremacy.
The State Administration for Market Regulation of China (SAMR) has launched a probe into the merger between Nvidia Corp. and U.S.-Israeli Mellanox Technologies Ltd. a maker of equipment for high-speed switched computer networks.
“Due to Nvidia’s suspected violation of China’s anti-monopoly law and the State Administration for Market Regulation’s restrictive conditions around Nvidia’s acquisition of Mellanox shares (…) the SAMR is opening a probe into Nvidia in accordance with law,”
according to a statement translated by CNBC.
According to Bloomberg, Chinese regulators say Nvidia failed to follow agreements to provide new Mellanox product information within 90 days to other chipmaking firms in the country to avoid a monopoly. At the same time, the US Justice Department is also investigating the company for monopolistic behavior.
Antitrust officials were concerned that Nvidia was making it harder to switch to other suppliers and penalizes buyers that didn’t exclusively use its artificial intelligence chips, people familiar with the matter had said.
Nvidia could also be accused of violating French antitrust law, Benoit Coeur, head of France's antitrust agency, said at a press conference in July. The charges could be related to Nvidia's alleged misuse of AI technology. In particular, the French regulator is concerned about the company's work on software called CUDA.
Nvidia struck a deal to buy Mellanox for $6.9 billion in 2019. At the time, it was a record deal in Nvidia's history.
The Biden administration also placed new sanctions on China last week to make it more difficult to produce advanced AI chips there, as it also restricts the capabilities of exports by companies like Nvidia. China retaliated with new limitations on key mineral exports to the US.
