China launches antitrust investigation into Nvidia

Nvidia, now the second-largest public company in the world by market capitalization trailing only Apple continues to dominate headlines. Recently, China's market regulator launched an investigation into Nvidia’s acquisition of Mellanox, a move reported by China Central Television .

Nvidia acquired Mellanox in 2019 for nearly $7 billion. The Israel-based company specializes in high-performance chips for supercomputers. At the time, China approved the deal on the condition that Nvidia and Mellanox adhere to several commitments. These included sharing details about new products with Nvidia’s competitors within 90 days of release and allowing Chinese chipmakers to test their products with Mellanox’s technology to ensure compatibility.

This investigation places Nvidia in a precarious position, especially as the U.S. has imposed strict export restrictions on advanced semiconductor technology, including some of Nvidia's most cutting-edge AI chips. These measures prevent Nvidia from selling its most advanced AI hardware to Chinese companies, escalating tensions between the two nations over critical technologies like GPUs used for generative AI.

In response to U.S. trade restrictions, China has implemented its own retaliatory measures, such as banning the sale of certain Micron products following a cybersecurity review. The current probe into Nvidia’s Mellanox acquisition is widely seen as another chapter in the ongoing economic and technological rivalry between China and the United States.

Nvidia’s role in the global tech ecosystem underscores its importance. Financial analysts predict that the top seven tech giants will see profit growth of 18% in 2025 but without Nvidia, that figure drops to just 3%. This highlights the critical role artificial intelligence plays in driving economic growth.

Adding to the complexity, the Biden administration recently expanded trade restrictions on advanced technology, particularly semiconductors that could be used in military applications or AI development. These policies intensify the geopolitical struggle over control of next-generation technologies, with Nvidia at the center of this unfolding drama.