China's market regulator said a preliminary investigation found Nvidia violated the country's anti-monopoly law, tied to commitments made when Beijing conditionally approved its 2020 Mellanox acquisition. The watchdog says the probe will continue. For a company that generated about 13% of revenue in China in the last fiscal year, that's not a footnote—it's material exposure under threat.
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The timing is pointed. Beijing's move landed as U.S. and Chinese officials convened trade talks in Madrid, underscoring how semiconductors sit at the center of a broader strategic rivalry. While the regulator hasn't detailed remedies, China's antitrust law allows fines of 1%–10% of prior-year sales, and the message to U.S. tech is unmissable: China will use regulatory levers when it wants to—and it's willing to keep the process open-ended.
Nvidia’s stock was down 0.3% at $177.22 on Monday, according to data from Benzinga Pro.
Regulators Play Chess With Chips
Nvidia's China troubles started in December 2024, when the Asian nation's market regulator, the State Administration for Market Regulation, launched its probe into Nvidia, alleging bundling practices and discriminatory terms that hurt Chinese buyers. This aligned with Beijing's push for chip self-reliance under its “Made in China 2025” plan, urging firms like Tencent to favor local chips, such as Huawei's Ascend, over Nvidia's.
The plot thickened in April 2025, when the Trump administration banned exports of Nvidia's China-tailored H20 chip, designed to comply with earlier Biden-era restrictions. The move, part of Trump's broader tariffs and curbs on more than 140 Chinese firms, led to a $5.5 billion inventory write-down and a drop in China sales. Ouch.
And that push is real. Alibaba and Baidu are testing and deploying in-house AI chips, while Huawei and Cambricon are gaining market share. Analysts at Bernstein expect Nvidia's China AI chip share to slip—from roughly two-thirds to about half—as domestic players rise and policy friction persists. Even if Nvidia resumes compliant shipments, it may not reclaim its former dominance in a market rewiring itself for self-reliance.
Trump's Move, China's Message: Game On
So, is Trump "to blame"? It's more complicated than that. U.S. controls didn't start with Trump—and plenty of voices in Washington argue for keeping advanced U.S. chips out of China on security grounds.
On the other hand, Trump’s April ban and overall hawkish stance arguably poked the bear, accelerating Beijing’s antitrust push as retaliation. Jim Cramer on CNBC has called Trump’s China policy a direct drag on Nvidia. And yeah, the timing of today’s ruling, right amid trade negotiations, smells like tit-for-tat.
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