China’s State Administration for Market Regulation (SAMR) announced Monday that a preliminary investigation found Nvidia violated the country’s antitrust law after failing to comply with conditions imposed on its acquisition of Mellanox Technologies. The agency said it will conduct a further investigation before determining penalties.

Nvidia completed its $6.9 billion acquisition of Mellanox in 2020. SAMR approved the deal on the condition that the company maintain fair competition in markets related to data transmission and networking equipment. SAMR started its review of Nvidia’s compliance with these conditions in December 2024.

Under China’s Anti-Monopoly Law, regulators may impose conditions on mergers that could affect market competition and can sanction companies that fail to comply. Possible remedies include fines, business restrictions, or forced divestitures. The regulator did not specify which conditions Nvidia allegedly breached, and it is unclear whether Nvidia will be punished.

The announcement follows recent US action against two Chinese companies accused of acquiring US-origin semiconductor manufacturing tools for use by Semiconductor Manufacturing International Corporation. The US Department of Commerce added two Chinese semiconductor manufacturers to its “Entity List,” requiring licenses for all items subject to regulations under a “presumption of denial” in the Federal Register under 15 C.F.R. § 744.11.