China's State Administration for Market Regulation released todayWei Ce, alleging that NVIDIA in 2019Mellanox acquisition completed for $69 billionAfter a preliminary investigation, the company determined that the transaction violated the Anti-Monopoly Law of the People's Republic of China and the restrictive conditions imposed on the transaction. Based on this conclusion, China's State Administration for Market Regulation will conduct a further investigation into NVIDIA, indicating that this transaction, which lasted more than five years, may still have a profound impact on NVIDIA's market presence in China.
Mellanox is renowned for its high-speed Ethernet and InfiniBand chip technologies. Its products are widely used in data centers, cloud storage, and AI supercomputing, making them key components of large-scale computing infrastructure. NVIDIA's acquisition of Mellanox, a major acquisition in the company's history, was driven by the company's goal of integrating its multi-level high-speed interconnect technology to complete its GPU-to-server solution and strengthen its data center competitiveness in the AI era.
However, although Chinese regulatorsConditional approval was given as early as 2020, demanding that NVIDIA maintain openness in areas such as technology licensing and supply fairness. However, with the recent concentration of the AI chip market and the intensification of the US-China technological confrontation, the Chinese market has become more rigorous in its scrutiny of NVIDIA.
This preliminary ruling of violating market monopoly means that NVIDIA's strategy for selling AI chips and network interconnection products in the Chinese market may face further adjustments, and may even require additional commitments in exchange for regulatory approval.
NVIDIA CEO Jensen Huang has visited China several times in recent years, attempting to maintain business stability amidst a tense international environment. He has also announced the release of several AI chips specifically tailored for the Chinese market. However, deepening regulatory investigations could further increase uncertainty for NVIDIA's operations in China.
Given the current tight global supply of AI GPUs, once restrictions in the Chinese market increase, it may not only affect NVIDIA's sales scale, but may also affect the entire cloud and AI industry chain.
NVIDIA has yet to publicly respond to the latest decision from China's State Administration for Market Regulation. It is expected that the two sides will engage in a period of negotiation, the outcome of which will directly impact NVIDIA's shipment strategy and partnership model in China.
