Nvidia’s 2020 acquisition of Mellanox violated China’s antitrust law, the country’s market regulator has preliminarily ruled.

China’s State Administration for Market Regulation (SAMR) opened an investigation into the deal in late 2024 and found that the GPU giant breached anti-monopoly laws by failing to fully comply with provisions outlined by the regulator when it approved the deal.

The regulator has not specified exactly how Nvidia has violated the regulations; however, Reuters reported that one such agreement term was that Nvidia would continue to supply the Chinese market with GPU accelerators, something which both the Biden and Trump administrations have sought to restrict.

China’s regulator can issue fines of between one and ten percent of a company’s annual sales from the previous year to those found to have violated antitrust laws.

Nvidia acquired the Israeli networking hardware provider for $6.9 billion in 2020. The deal was first announced in March 2019, but didn’t close until the following April as it was waiting for regulatory approval from the Chinese government.

Government representatives from the US and China met in Madrid over the weekend to continue trade talks, but it's likely this ruling could complicate matters, as could two additional probes opened by the Chinese government in recent days: an anti-dumping investigation into certain analog IC chips imported from the US and an anti-discrimination probe into the US government’s restrictions on China’s chip sector.

On a visit to Beijing earlier this year, Huang cautioned against stopping US companies from selling to China, arguing that it risks handing AI leadership to domestic companies like Huawei.

“It’s really important that American companies are able to compete and serve the market here in China,” Huang said.