China launches antitrust investigation against Nvidia.
Nvidia's artificial intelligence chip business is facing pressure.
The Chinese Administration has launched an antitrust investigation against Nvidia, focusing on the acquisition of Mellanox, an Israeli networking hardware company, which cost $6.9 billion in 2020. Chinese authorities allege that the chipmaker did not comply with the terms set during the approval process of this acquisition.
Jensen Huang, CEO of Nvidia, emphasized the relevance of Mellanox to the company when presenting the DGX A100 GPU, explaining that modern data center architectures must adapt to increasingly diverse workloads. According to Huang, Nvidia's perspective is to view data centers as a comprehensive computing unit, rather than focusing solely on servers or personal computers.
Since that acquisition, the demand for artificial intelligence chips and servers has skyrocketed Nvidia's value from less than $200 billion to over $3 trillion in 2024, surpassing major tech companies like Microsoft, Apple, and Google. However, it is claimed that Nvidia did not provide other chip manufacturing companies in China with information on new Mellanox products within the 90-day timeframe, which could have fostered monopolistic conditions.
Additionally, the U.S. Department of Justice is conducting a similar investigation into Nvidia's competitive practices, amid a context where the Biden administration has imposed new sanctions on China, complicating the production of advanced AI chips. In response, China has implemented additional restrictions on the export of key minerals to the U.S.
