Nvidia headquarters pictured as China accuses the company of breaching anti-monopoly laws over the Mellanox deal.
Nvidia anti-monopoly breach of breaking anti-monopoly law full details
The Chinese government recently made a big announcement. He said that Nvidia has violated the anti-monopoly law. Also, this news came on 15 September 2025. The State Market Regulatory Administration (SAMR) concluded this after a preliminary investigation. Nvidia is an American chip company. It is a leader in artificial intelligence (AI) chips. But this investigation is related to an acquisition in 2020. In that, Nvidia bought Israeli company Mellanox. China had approved that deal with conditions. But now it is alleged that Nvidia did not follow those conditions. Also, this matter shows the growing tension between the US and China. The US has banned the sale of advanced chips to China. In response, China is putting pressure on American tech companies. Let’s talk about this topic in detail. So that we will cover every aspect.
Nvidia’s background and its role in China
Nvidia was founded in 1993. Jensen Hwang is its CEO. The company also makes graphics processing units (GPUs). These are used in AI, gaming and data centers. And by 2020, Nvidia’s market cap exceeded $300 billion. Also, China is a big market for Nvidia. In the financial year 2025 (till January 2025), the company earned $17 billion from China. This is 13 percent of total sales. Demand increased in China due to the AI boom. But US sanctions affected the supply. Due to which Nvidia now has to sell low-power chips. Also, Nvidia’s success depends on AI. The company’s chips accelerate data training. China does not want to lag behind the US in AI. Therefore it is promoting local chip makers. But Nvidia is still the major supplier.
Full story of Mellanox acquisition deal
In 2020, Nvidia bought Mellanox Technologies for $7 billion. Mellanox is an Israeli company. It also makes networking chips and software. These are used for high-speed data transfer. The acquisition gave Nvidia a strong position in AI data centers. But China approved this deal. But with conditions. SAMR said that Nvidia will not monopolize the market. It will give fair access to the products. Will not hinder competitors. Will not raise prices unfairly. Bundling was to be avoided. That is, not to sell chips together forcefully. Also, these conditions were under the anti-monopoly law. China’s law came in 2008. It was tightened in 2022. Now the focus is on Big Tech. So that Nvidia accepted these conditions. But the investigation started after four years
Investigation started December 2024 announcement
SAMR started the investigation in December 2024. He said that Nvidia violated the terms of the Mellanox deal. There was a suspicion that the company influenced the market. Harmed competitors. Also, the focus of the investigation was on networking products. After Mellanox, Nvidia launched integrated solutions. So that such as networking hardware with GPU. It is alleged that this forced customers. The option of choosing an alternative was reduced. Also it was time sensitive. The US imposed new export controls in November 2024. More restrictions on AI chips. China retaliated. Targeted companies like Nvidia. Experts say it is political. But the legal basis is strong.
Results of preliminary investigation: September 15, 2025
On September 15, 2025, SAMR released a preliminary report. They found that Nvidia broke the anti-monopoly law. The terms were violated. Also did not elaborate. Only said that further investigation will be done. And the results mention that Nvidia hindered competition. Raised the prices of products. Strengthened market share. This is related to the integration of Mellanox. The company has not commented yet. But the stock market was affected. The preliminary investigation lasted 9 months. The review of documents was conducted. Company officials were questioned. Data analysis was performed. A full investigation will be conducted now. More evidence will be collected.
Main reasons for the violation What went wrong
According to experts, there are many reasons. But the first is bundling. Nvidia sold GPU and networking in one package. Also, customers could not buy separately. Second, lack of fair access. Competitive companies could not use Mellanox technology But third is price increase. Products became expensive after the acquisition. China’s data centers were affected. Fourth is market dominance. Nvidia’s share increased to more than 80 percent. This is a sign of monopoly. Also, according to the law, such practices are illegal. China now wants to protect local players. Like HiSilicon or SMIK. These are becoming alternatives to Nvidia. But they are still behind.
Possible punishment and impact What will be the impact on Nvidia?
China’s anti-monopoly law is strict. And violation can lead to a fine of 1 to 10 percent. On last year’s China sales. 10 percent of $17 billion means $1.7 billion. This is a big blow for Nvidia. Other effects include business restrictions. Difficult to sell products. Divestment order. That means some assets will have to be sold. But it is an initial stage. But the fine would have been the main thing. Also, the market reaction was immediate. Nvidia shares fell 2 percent in the pre-market. US index futures also fell. Affected. Investors worried. Because China is a big market. Impact on AI growth. And Nvidia may have to change strategy. Increasing local partnerships. But challenge due to sanctions. Company’s revenue more than $100 billion in 2025. But China’s share may be less.
US-China tech war big context
This investigation is not the only one. Also, a tech war is going on between America and China. Trade war started in 2018. And focus on chips during Trump’s time. Biden continued. Export ban on advanced chips in 2022. Also Nvidia affected. China could not sell H100 chips. Now low power ones like H20. But China responded. Investigation on Texas Instruments as well. On Qualcomm. But trade talks are going on in Madrid. Chips are the issue. China says that America is imposing unfair restrictions. Our market is open. But now retaliation. This will affect the global supply chain. And both countries are ahead in the AI race. China wants to become the leader by 2030. So that companies like Nvidia can target. Countries like India can benefit. They can remain neutral.
Nvidia’s response and future prospects
Nvidia has not yet made any statement. But in the past the company promised cooperation. And when the investigation started in 2024, it said that it will follow the law. The same expectation now. Also what about the future? The entire investigation can take 6-12 months. If found guilty, then fine. But there is an option for appeal. Nvidia is strong in chip design. It will bring new products. So benefit for China. Local industry grows. But supply issues in the short term. Less impact on global AI. Because Nvidia’s market share is large. And experts advise. Companies should diversify. Focus on other markets in Asia
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