The Chinese government has announced that Nvidia violated business antitrust laws when it acquired Israeli company Mellanox for $6.9 billion in 2020. China began reviewing the acquisition in 2024, even though it had previously approved the acquisition. However, the Chinese antitrust authority claimed that “it was approved under certain conditions,” without specifying what the conditions were, nor did it specify the nature of the suspicions against Nvidia.
Despite the Chinese announcement, these are only findings of a preliminary examination conducted by the antitrust authority there. The Chinese authorities have clearly stated that the procedure has not yet been completed and that they are continuing to examine the facts. In practice, according to estimates, China’s aim is to create leverage over the US during the trade talks currently taking place between the countries in Spain.
The merger deal was approved in 2020 by regulators in the US, Europe and Israel – back when Nvidia was a company worth ‘only’ $200 billion. No one imagined how the AI revolution that began in November 2022 with the launch of OpenAI’s ChatGPT would transform Nvidia from a company famous for graphics chips for computer games, to a company that rules the AI world with giant servers based on its graphics processors worth more than $4 trillion.
Will a big fine be imposed on Nvidia?
When China makes a final decision on Nvidia, it could impose a fine ranging from 1% to 10% of its revenue in the country, which could reach $1.7 billion. Nvidia reported $17 billion in revenue from China over the last fiscal year, 13% of its overall revenue, but in the first half of 2025 its sales in China were dramatically reduced due to the Trump administration’s ban on the company selling its unique H20 processors on the Chinese market.
Mellanox has been seen as an invaluable acquisition for Nvidia. The communications chips produced in Yokneam and Tel Aviv allow data to flow smoothly and quickly between Nvidia’s graphics processors, relieving bottlenecks in AI servers amid growing demand for AI processing.
Mellanox’s importance to Nvidia has been highlighted in recent quarters, when it emerged as the fastest-growing business within Nvidia and the second-largest component of the company’s revenue. Now, the Yokneam company has become another stumbling block in the deteriorating relationship between the US and China.
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Nvidia said, “We comply with the law in all respects. We will continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets.”
Published by Globes, Israel business news – en.globes.co.il – on September 16, 2025.
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