China Extends Antitrust Probe into Nvidia; Shares Slide in Premarket

Lead China’s market regulator announced on Monday it will extend its antitrust investigation into Nvidia’s 2020 Mellanox acquisition, sending NVDA stock down more than 2% in premarket trading in New York.

Nut Graf The probe into potential breaches of China’s competition laws underscores escalating U.S.-China tech tensions amid high-level trade talks in Madrid. Nvidia’s reliance on the Chinese market for AI-chip sales makes this development particularly significant for investors and policymakers.

Probe Details and Market Reaction

The State Administration for Market Regulation (SAMR) said preliminary findings show Nvidia failed to meet commitments tied to its $7 billion Mellanox deal, approved by Beijing in 2020.
Nvidia shares fell roughly 2.4% premarket in New York; retail sentiment on trading platforms turned bearish as message volumes remained low.

Geopolitical Context

The announcement coincides with fourth-round U.S.-China trade talks in Madrid aiming to ease tariffs and address technology export controls.
Earlier this year, Washington imposed export curbs on high-performance AI chips, prompting Nvidia to develop workaround products for the Chinese market.

Implications for Nvidia and the AI Sector

Continued regulatory scrutiny could limit Nvidia’s access to China, which accounted for about 13% of its revenues last year.
Analysts warn that further restrictions or penalties might force Nvidia to set aside $2-5 billion of quarterly revenue from Chinese sales.
Nvidia CEO Jensen Huang has lobbied U.S. authorities to maintain chip exports, arguing absence would cede ground to domestic competitors like Huawei.

What’s Next

SAMR will pursue a full investigation and determine whether Nvidia must divest assets or pay fines.
Investors will watch Nvidia’s quarterly earnings call and any guidance on Chinese operations.
U.S. and Chinese negotiators are expected to continue discussions on technology trade and antitrust concerns through Tuesday.