Core Viewpoint - The State Administration for Market Regulation (SAMR) has decided to conduct further antitrust investigations against NVIDIA, accusing the company of violating antitrust laws and the restrictive conditions set during its acquisition of Mellanox Technologies [1][3][4]. Group 1: Investigation Details - The SAMR's latest decision indicates a deepening antitrust review of NVIDIA, following an initial investigation that began in December 2022, which found potential violations [6]. - Specific regulations allegedly violated by NVIDIA include the Anti-Monopoly Law of the People's Republic of China and the restrictive conditions outlined in SAMR's announcement regarding the approval of NVIDIA's acquisition of Mellanox [6]. Group 2: Acquisition Background - NVIDIA's acquisition of Mellanox, valued at $6.9 billion, began with an agreement signed on March 10, 2019, and received approval from the Chinese government in April 2020 under certain restrictive conditions [8]. - The approval process highlighted the regulatory body's cautious approach, as NVIDIA initially withdrew its application in February 2020 before resubmitting it for review [8]. - The SAMR assessed that the acquisition could significantly impact key technology markets, particularly in GPU accelerators, dedicated networking devices, and high-speed Ethernet adapters, which justified the imposition of restrictive conditions [8].

Core Viewpoint - The Chinese market regulator has escalated its antitrust investigation into NVIDIA, accusing the company of violating antitrust laws and the restrictive conditions set during its acquisition of Mellanox Technologies, indicating increased scrutiny on the AI chip giant [1][3]. Group 1: Investigation Details - The State Administration for Market Regulation (SAMR) has determined that NVIDIA violated the Anti-Monopoly Law of the People's Republic of China and related regulatory decisions, leading to a more stringent investigation process following an initial inquiry that began in December 2022 [1][3]. - The investigation specifically targets NVIDIA's $6.9 billion acquisition of Mellanox, which was approved with additional restrictive conditions by the Chinese government in 2020 [1][4]. Group 2: Acquisition Background - NVIDIA's acquisition of Mellanox began with an agreement signed on March 10, 2019, and after a lengthy regulatory review, it received approval in April 2020 under specific conditions [4]. - The approval process highlighted the regulator's cautious approach, as the application was initially withdrawn and then resubmitted, reflecting the significant impact of the acquisition on key technology markets, including GPU accelerators and high-speed Ethernet adapters [4].

Core Viewpoint - Nvidia is under investigation by China's State Administration for Market Regulation for allegedly violating antitrust laws related to its acquisition of Mellanox Technologies, which was approved with specific restrictive conditions in 2020 [2][4]. Group 1: Investigation Details - The investigation pertains to Nvidia's $6.9 billion acquisition of Mellanox, which significantly impacts supercomputing and artificial intelligence [4]. - The State Administration for Market Regulation had previously imposed conditions on the acquisition, including prohibiting forced bundling and unreasonable trading conditions [4][34]. - The specific violations by Nvidia regarding these conditions are currently unknown [4]. Group 2: Mellanox Overview - Mellanox, founded in 1999, is a leader in high-performance interconnect technology, particularly known for its InfiniBand technology used in over half of the world's supercomputers [5][6]. - The acquisition of Mellanox by Nvidia is seen as a strategic move to enhance Nvidia's position in the cloud AI chip market [6]. Group 3: Competitive Landscape - Nvidia's GPUs are the dominant solution for cloud AI acceleration, with competitors lacking the ecosystem and software tools that Nvidia offers [7]. - The combination of Nvidia's GPUs and Mellanox's interconnect technology creates a formidable barrier to entry for other AI chip companies, particularly in distributed training environments [8][10]. - The integration of these technologies is expected to solidify Nvidia's market position and increase competitive pressure on other players in the AI chip market [8][10]. Group 4: Market Dynamics - The GPU and interconnect device markets are characterized by high entry barriers due to capital and technology intensity, making it difficult for new entrants to compete effectively [29]. - Nvidia and Mellanox's combined market power allows them to potentially engage in anti-competitive practices, such as bundling products and limiting interoperability with third-party devices [30][31]. Group 5: Regulatory Conditions - The approval of the acquisition included several conditions aimed at mitigating anti-competitive risks, such as ensuring non-discriminatory practices in product sales and maintaining interoperability with third-party devices [34][35]. - These conditions are legally binding and will be monitored by the regulatory authority to ensure compliance [38].