Nvidia’s position in China just got shakier. Regulators have opened an anti-monopoly investigation into the chipmaker, accusing it of breaching commitments tied to its 2020 Mellanox acquisition. The move lands right as US-China trade talks begin in Madrid, with chips squarely on the table.
Nvidia faces a fresh controller challenge from Chinese regulators
The probe, first launched in December 2024, centers on Nvidia’s agreement to maintain GPU supply in China after its Mellanox purchase. Since then, US export controls have blocked the sale of Nvidia’s most advanced chips to Chinese customers, undermining that pledge.
Now, China’s antitrust agency alleges Nvidia failed to uphold the deal. Under Chinese law, potential fines range from 1% to 10% of annual sales, making this more than just a slap on the wrist.
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China turns up pressure as trade talks open in Madrid
The investigation comes as US Treasury Secretary Scott Bessent and Chinese officials meet in Madrid. While Bessent called the timing “poor,” analysts suggest it’s no accident. With Nvidia caught in the crossfire, some view the probe as a high-stakes leverage move.
Meanwhile, China just launched another investigation, this time an anti-dumping probe into US analog chips. The tech war is heating up again, and Nvidia may be the test case.
Controller crackdown hits Nvidia’s Mellanox networking business
Beyond GPUs, Nvidia’s Mellanox division, responsible for high-speed networking gear, is at risk. Billions in future sales could be impacted if Chinese buyers pull out. Despite CEO Jensen Huang’s repeated visits to China, the government has reportedly discouraged firms like Tencent and ByteDance from purchasing Nvidia hardware.
At the same time, China is pushing homegrown options. H20 chips, built specifically for the Chinese market, remain in limbo thanks to unresolved US payment rules.
Here’s what’s stacking up against Nvidia:
- 13% of total sales come from China
- H20 chips stuck in regulatory limbo
- Government pressure on firms to switch suppliers
- Mellanox’s networking business is facing disruption
- Potential fines tied to anti-monopoly law
Trade war backdrop adds uncertainty for controller giant
This isn’t just about legal commitments, it’s about tech sovereignty and trade strategy. Chinese officials have openly called for a full stop on Nvidia GPU usage, citing national interest. Whether symbolic or substantive, the message is clear: reliance on US tech comes at a cost.
Even so, experts believe Nvidia is unlikely to be pushed out entirely. But the investigation sends a warning and sets the tone for how China plans to negotiate under pressure.
