China has dealt Nvidia another blow, finding the chipmaker in violation of the country's anti-monopoly Law and escalating a long-running regulatory headache into a full investigation.

China's State Administration for Market Regulation (SAMR) [1]said on Monday that its preliminary investigation found Nvidia violated the country's competition rules, as well as the terms of a conditional approval it granted in 2020 for one of Nvidia's acquisitions.

"Recently, after preliminary investigation, Nvidia violated the Anti-Monopoly Law of the People's Republic of China," the regulator asserted in a brief statement, translated by The Register .

[2]

With that box ticked, SAMR has escalated the case to a formal probe – a process that could end with hefty fines for Nvidia and potentially new operational restrictions on how it sells kit in the country.

[3]

The watchdog's statement didn't say exactly what Nvidia had done wrong, but pointed squarely at conditions imposed when it initially waved through [4]the company's $6.9 billion takeover of Mellanox Technologies . Those conditions were designed to stop Nvidia from using its newly acquired networking arm to squeeze Chinese rivals and to maintain interoperability with other vendors.

[5]Alibaba looks to end reliance on Nvidia for AI inference

[6]AI arms dealer Nvidia laments the many billions lost to US-China trade war

[7]To heck with export controls! Nvidia reportedly plotting cut-down B300 for Chinese market

[8]Beijing doesn't want Nvidia's H20s anywhere near sensitive government workloads

Nvidia didn't immediately respond to The Register's request for comment, but the company's stock was quick to react – dipping 2 percent in pre-market trading on Monday.

This is just the latest flare-up in what's been a tense year for Nvidia in China. In July, [9]Beijing summoned the company over security concerns about its H20 AI accelerators , claiming there were "serious security vulnerabilities" in Nvidia's China-specific product line. These chips were hastily cooked up after Washington tightened export rules in 2023 to stop China from getting its hands on top-tier AI silicon for military and surveillance use.

China is one of Nvidia's most important markets, worth an estimated $17 billion in sales last fiscal year – roughly 13 percent of the chipmaker's global revenue. Any fines or behavioral remedies will add further strain to a business already squeezed by Washington's export controls and forced to flog watered-down GPUs to keep the cash flowing. ®

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[1] https://www.samr.gov.cn/xw/zj/art/2025/art_66b8363c3a194ba0a394a843d6cf3fd1.html

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aMg4Fu5j7XJEUZ1ohd1nuAAAAFI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aMg4Fu5j7XJEUZ1ohd1nuAAAAFI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[4] https://www.theregister.com/2020/05/04/nvidia_cumulus_mellanox/

[5] https://www.theregister.com/2025/08/29/china_alibaba_ai_accelerator/

[6] https://www.theregister.com/2025/08/27/nvidia_q2_china/

[7] https://www.theregister.com/2025/08/19/nvidia_cut_down_b300_for_china/

[8] https://www.theregister.com/2025/08/12/china_nvidia_h20/

[9] https://www.theregister.com/2025/07/31/beijing_nvidia_backdoors/

[10] https://whitepapers.theregister.com/