China has launched an antitrust investigation into NVIDIA, the American technology giant, over its 2020 acquisition of Israeli network hardware company Mellanox. The probe, announced by Chinese regulators, alleges that NVIDIA failed to comply with conditions set during the approval process for the $6.9 billion acquisition.

The investigation centers around NVIDIA's failure to provide new Mellanox product information to other chipmaking firms in China within the stipulated 90-day timeframe. This move, according to Chinese regulators, could have led to a monopoly in the market. The acquisition, which was completed in 2020, has been a significant factor in NVIDIA's rapid growth, with the company's value surging from under $200 billion to over $3 trillion in 2024.

NVIDIA's CEO, Jensen Huang, had emphasized the importance of the Mellanox acquisition, stating that it would enable the company to think about the entire data center as a computing unit. This approach, Huang explained, would allow NVIDIA to focus on data center-scale computing, moving beyond personal computers or servers. The acquisition has indeed played a crucial role in NVIDIA's dominance in the AI chip and server market, which has experienced a significant boom in demand in recent years.

The Chinese investigation into NVIDIA's antitrust violations comes at a time when the company is already facing scrutiny from the US Justice Department for monopolistic behavior. The Biden administration has also imposed new sanctions on China, aimed at restricting the production of advanced AI chips in the country. In response, China has retaliated with new limitations on key mineral exports to the US, further escalating the tensions between the two nations.

The implications of this investigation are far-reaching, with potential consequences for NVIDIA's business operations in China and beyond. As the global technology landscape continues to evolve, the scrutiny of NVIDIA's business practices serves as a reminder of the importance of fair competition and regulatory compliance in the tech industry.

As the investigation unfolds, it remains to be seen how NVIDIA will respond to the allegations and what measures it will take to address the concerns of Chinese regulators. One thing is certain, however – the outcome of this probe will have significant implications for the future of the tech industry, particularly in the realm of AI chip development and data center-scale computing.