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 valued at $6.9 billion in 2020 [2][5][31]. Group 1: Investigation Details - The investigation stems from Nvidia's 2020 acquisition of Mellanox, which is significant for supercomputing and artificial intelligence [5][6]. - The State Administration for Market Regulation had previously approved the acquisition with specific conditions to prevent anti-competitive practices, such as prohibiting forced bundling and unreasonable trading conditions [5][31]. - The exact nature of Nvidia's violations of these conditions is currently unclear [5]. Group 2: Mellanox Overview - Mellanox, founded in 1999, is a leader in high-performance interconnect technology, particularly known for its InfiniBand technology, which is used in over half of the world's supercomputers [6][7]. - The acquisition of Mellanox by Nvidia is seen as a strategic move to integrate core technologies essential for cloud-based AI solutions [7][9]. Group 3: Market Impact - The merger is expected to create a significant competitive barrier in the AI chip market, as Nvidia's GPUs and Mellanox's networking technologies will be tightly integrated [9][10]. - Nvidia's dominance in the GPU market (90-95% globally) and Mellanox's strong position in networking (55-60% globally) raises concerns about potential anti-competitive behavior post-merger [25][26]. - The combined entity's ability to control pricing and market access could limit competition, particularly in the rapidly growing AI and data center sectors [27][28]. Group 4: Regulatory Conditions - The approval of the acquisition included several conditions aimed at maintaining market competition, such as ensuring non-discriminatory practices in product sales and maintaining interoperability with third-party products [31][32]. - These conditions are legally binding and will be monitored by the regulatory authority for compliance [34].