The Chinese antitrust authority previously approved Nvidia’s acquisition of Mellanox in 2020.

The Chinese State Administration for Market Regulation launched an investigation into Nvidia, the US chipmaker, for allegedly violating the country’s antitrust laws during its 2020 acquisition of the Israel-based Mellanox Technologies.

According to China, Nvidia, through its $7bn acquisition of Mellanox, a high-speed server manufacturer, is suspected of violating the country’s anti-monopoly laws.

However, in its announcement yesterday (9 December), the country did not specify what the merger did to potentially break laws. Moreover, China had previously approved the acquisition in 2020.

Last month, Nvidia overtook Apple to become the world’s largest company, with a valuation of more than $3.4trn. However, following China’s probe announcement yesterday, the company’s share prices took a hit of more than 2.5pc with ongoing effects.

The investigation comes during turbulent times between China and the US – the latter of whom placed its third clampdown on the Chinese semiconductor industry in three years, which the it said is designed to “further impair the People’s Republic of China’s capability to produce advanced-node semiconductors”.

The newest US regulations, announced earlier this month, will prevent China from accessing certain types of chip-manufacturing equipment and software programs, while placing restrictions on selling high-bandwidth memory, an advanced kind of 3D-stacked computer used in customised AI chips to China.

Meanwhile, days later, the Chinese government, citing “national security” concerns, announced that it will ban exporting key components involved in semiconductor manufacturing to the US.

US president-elect Donald Trump has had a hard lined approach towards China for years. His second-term cabinet selection consists of several ‘China hawks,’ including the former director of National Intelligence John Ratcliffe as the head the CIA, Fox News host Pete Hegseth as the secretary of defence, and Florida Congressperson Michael Waltz as national security adviser.

The trouble is ongoing, as stock prices of some of the biggest global chipmakers, including ASML, Nvidia and AMD took a hit earlier this year as a result of geopolitical tensions between the two countries that rose amidst reports that the US was considering tighter restrictions for exports of advanced semiconductor technology to China.

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