The Chinese government has declared war on Nvidia

China has accused US-based tech giant Nvidia of violating competition laws. This development has further escalated chip trade tensions between Washington and Beijing. China’s State Administration for Market Regulation (SAMR) ruled that Nvidia’s $7 billion acquisition of networking solutions company Mellanox Technologies in 2020 violated competition rules.

China accuses Nvidia of violating competition laws

Following this ruling, Nvidia released a statement confirming its compliance with the law. The company said, “We are complying with the law in every respect. We will continue to cooperate with all relevant government agencies as we assess the impact of export controls on competition in commercial markets.” China has not yet announced any sanctions but has stated that the investigation will continue.

Experts believe this decision will negatively impact trade negotiations between the US and China. While semiconductors were not directly on the agenda of the Madrid talks, China’s access to Nvidia chips remains a major point of contention between the two countries.

The situation on the US side is also uncertain. The Biden administration previously introduced a regulation restricting the export of AI chips to China, but later rescinded the rule. The Trump administration, on the other hand, required licensing agreements for chip exports but soon granted sales permission to companies.

Most recently, the US signed a new agreement requiring companies selling chips to China to pay 15% of their sales revenue to Washington. Throughout this process, China has been discouraging companies from purchasing Nvidia chips, and according to the latest financial data, no Nvidia chips have been sold to China under the new export regime.