"On Monday, China's State Administration for Market Regulation ruled that semiconductor giant Nvidia was in violation of the country's antitrust regulations, as first reported by Bloomberg. The ruling was in reference to Nvidia's 2020 acquisition of Mellanox Technologies, a computer networking supplier, for $7 billion. An Nvidia spokesperson supplied the following statement, "We comply with the law in all respects. We will continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets.""
"China didn't announce any consequences tied to its findings and will continue to investigate. Still, the ruling is likely to cast a pall over ongoing tariff negotiations between the U.S. and China, currently taking place in Madrid. While these trade discussions aren't specifically about semiconductors, the question of Chinese access to Nvidia chips is a major point of contention between the two regimes."
"While the U.S. Department of Commerce formally repealed Biden's AI rule in May, the future of AI chip exports to China remains in flux. The Trump administration slapped licensing agreements on chips heading to China in April. A few months later, in July, these companies were given the green light to start selling these chips again."
"Just a few weeks after that the country struck a deal requiring companies selling chips to China to give the U.S. a 15% cut of the revenue made on those sales. China has discouraged firms from buying Nvidia chips and, as of a recent earnings call, none of the company's chips have made it through the new export process."
China's State Administration for Market Regulation found Nvidia in violation of antitrust regulations related to its 2020 $7 billion acquisition of Mellanox Technologies. Nvidia said it complies with the law and will cooperate with relevant government agencies assessing export-control impacts on competition. China announced no penalties and will continue investigating. The ruling could affect ongoing U.S.-China tariff negotiations in Madrid because Chinese access to Nvidia chips remains a central dispute. U.S. export-policy changes have included the Biden AI Diffusion Rule, a Commerce repeal in May, Trump-era licensing actions, a temporary July green light, and a subsequent deal requiring a 15% U.S. cut on China-bound chip sales. China has discouraged purchases and none of Nvidia's chips have cleared the new export process.
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