China accuses Nvidia of violated antimonopoly laws

China’s market regulator on Monday accused Nvidia of violating Chinese antimonopoly laws and said it would continue investigating the leading U.S. chipmaker.

The State Administration for Market Regulation issued a brief statement on Monday saying a “preliminary investigation” found Nvidia in violation of the Chinese law in connection to its $6.9 billion acquisition of Mellanox Technologies, an Israeli-American network and data transmission company.

Beijing approved the deal, which was completed in 2020, after Nvidia agreed to certain conditions, including a guarantee to supply its chips to China. The Biden administration, however, put restrictions on exports of some top AI chips to China, putting Nvidia in a tough spot.

The one-sentence statement did not detail any alleged violations against Nvidia or mention any punishment but said it would proceed with “further investigation.”

China, in December, opened an investigation into Nvidia for alleged violations stemming from the Mellanox acquisition. That came a week after the Biden administration tightened restrictions on China’s access to its most advanced chips.

Chinese regulators at the time said by complying with U.S. export controls, Nvidia was violating its pledge to provide an uninterrupted supply of chips to China and treat Chinese consumers equally, according to The Wall Street Journal, which cited antitrust lawyers familiar with the case.

The latest escalation from Beijing comes as Treasury Secretary Scott Bessent is in Madrid to meet with Chinese Vice Premier He Lifeng for the fourth round of talks on issues including tariffs and ownership of TikTok.

Nvidia has become among the most high-profile companies to get caught in the middle of the U.S.-China trade clash. President Trump gave his approval for Nvidia to resume its sales of the H2O chip, which Trump previously blocked in April. China, however, subsequently blocked companies from buying the chip, citing cybersecurity concerns, until the U.S. chipmaker cleared a regulatory review, the Journal reported.

China has recently taken other steps to crack down on the U.S. chip industry. The Chinese Ministry of Commerce said on Saturday it is carrying out an antidumping investigation into certain analog IC chips imported from the U.S., and the ministry announced a separate antidiscrimination probe into U.S. measures against China’s chip sector, The Associated Press reported.

Nvidia did not respond to an immediate request for comment.