China has launched an antitrust investigation against Nvidia over possible violations of the country’s antimonopoly laws in connection with its 2020 acquisition of Israeli chipmaker Mellanox Technologies. A Bloomberg report (via The edge) claims that the Chinese government approved the $7 billion deal on the condition that Nvidia not discriminate against Chinese companies and that Mellanox provide samples of new products to competing companies within 90 days of their made available to Nvidia to ensure they can maintain performance parity.
Details of the investigation have not been shared, but it is notable because of U.S. sanctions that limit Nvidia’s ability to export products to China. Nvidia attempted to circumvent these restrictions by designing certain products specifically for the Chinese market: when the US Department of Commerce introduced restrictions on RTX 4090 GPUs in 2023, for example, Nvidia quickly launched the RTX 4090Dan export-only model, built exclusively for China and designed to circumvent export controls.
The US government has indicated its dissatisfaction with this approach in 2023, however: US Commerce Secretary Gina Raimondo said at the Reagan National Defense Forum in December of that year that “we can’t let China get these chips, period”, before warn: “If you redesign a chip around a particular cut line that allows them to do AI, I’m going to control it the very next day.”
China was a major export market for Nvidia before sanctions, according to The Guardianbut it now faces growing competition from Chinese manufacturers: the country was responsible for 17% of Nvidia’s revenue for the year ending January 2024, down significantly from 26% two years earlier.
The investigation into Nvidia is not China’s only reaction to aggressive US sanctions against the country. CNN reported last week that following the introduction of new restrictions on the sale of equipment used to make semiconductors and other access points to American technology, China had banned the sale of various materials used in the construction of semiconductors and electric vehicle batteries, including gallium, germanium. , antimony and other “super hard” materials.
“Nvidia wins on merit, as evidenced by our benchmark results and the value delivered to customers, and customers can choose the solution that works best for them,” an Nvidia representative said in a statement provided to PC Gamer. “We work hard to provide the best possible products in every region and honor our commitments wherever we operate. We will be happy to answer any questions regulators may have about our activities.