Nvidia stock drops 3% after China accuses it of anti-monopoly breach

Nvidia’s stock dropped 3% on Monday morning after Beijing publicly accused the company of breaking China’s anti-monopoly law. The allegation came from China’s State Administration for Market Regulation (SAMR), which said a preliminary probe had found that Nvidia didn’t follow the rules tied to its 2020 acquisition of Israeli chipmaker Mellanox Technologies.

According to SAMR, Nvidia may have violated the conditions that China imposed when it approved the Mellanox deal. The agency didn’t stop there. Officials said the investigation is still active and would continue. As of Monday, Nvidia has not issued a response.

Regulators accuse Nvidia of breaking its 2020 commitments

Back in 2020, Nvidia secured China’s approval to acquire Mellanox — a company that builds networking hardware for data centers and servers — but with strings attached. The deal got greenlit only after Nvidia made specific promises to China’s regulators. Now, SAMR claims those promises were broken.

SAMR said the U.S. chipmaker is suspected of ignoring obligations it agreed to under the deal’s terms. The agency’s preliminary report said Nvidia’s conduct breached China’s Anti-Monopoly Law, and the regulator confirmed the case is still open. The announcement sent Nvidia stock tumbling in U.S. premarket trading.

Under China’s antitrust law, a company found guilty of anti-competitive behavior can be hit with fines ranging from 1% to 10% of its prior year’s sales. Nvidia made $17 billion in revenue from China in its last fiscal year, ending January 26. That accounted for 13% of Nvidia’s total sales, based on the company’s most recent annual report. Any penalty could be massive.

This is all happening while U.S. and Chinese officials meet in Madrid to discuss trade. Reports say semiconductors are at the top of the agenda, and Nvidia’s name is on the list. With the U.S. placing restrictions on advanced chip exports to China, and Beijing tightening its own rules, tensions are already sky-high.

China opens anti-dumping probe into U.S. chip imports

Two days before the SAMR announcement, China’s Ministry of Commerce hit back with another move: it opened an anti-dumping investigation into analog integrated circuits coming from the United States.

In a public statement released Saturday, a ministry spokesperson said, “The U.S. government has recently overstretched the concept of national security, abused export controls and long-arm jurisdiction, and maliciously blocked and suppressed China’s chip products and the artificial intelligence industry.” They added that these actions “seriously violated WTO rules” and hurt Chinese companies.

The probe follows a complaint by a provincial semiconductor industry association representing Chinese chipmakers. The ministry said the investigation will focus on interface IC chips and gate driver IC chips produced with 40-nanometer or larger process technologies. The dumping complaint argues that from 2022 to 2024, U.S. imports of these chips into China surged by 37%, while prices fell by 52%. That drop in pricing, they claim, damaged local chip production.

The Commerce Ministry confirmed the case was filed under Chinese law and WTO rules, saying the anti-dumping investigation would be conducted fairly and by the book. The process is expected to finish by September 13, 2026, but could stretch another six months if “special circumstances” arise.

The ministry said Chinese authorities will follow statutory procedures, protect the rights of all involved parties, and issue a final ruling based on evidence. The investigation, they said, was not politically motivated, but driven by the interests of local industry.

As the U.S. and China face off over chip policy, trade routes, and global supply chains, the pressure on Nvidia is growing fast. The company’s silence won’t hold forever, and the risk of a massive fine from Beijing is now very real.

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