Nvidia is a United States (US) technology company that dominates hardware and software necessary for Artificial Intelligence (AI) applications across the globe. Its crucial importance for the development of AI has put it in the middle of the trade dispute between the U.S. and China. As a result of this situation and the current trade war, Nvidia faces the prospect of major economic losses. However, Nvidia should not be accountable for finding itself unwittingly caught in the middle of the current US-China tug-of-war.
The recent trade policies that the US has imposed on China have made it impossible for Nvidia to comply with its existing obligations to China. Originally, China’s State Administration for Market Regulation (SAMR) had approved Nvidia’s 2020 acquisition of Mellanox, a US chip company, for 6.9 billion dollars, but only under the condition that Nvidia maintain a fair and non-discriminatory supply of its Graphics Processing Unit (GPU) accelerators and interconnection products to the Chinese market. U.S. export controls, however, forced Nvidia to discontinue the sales of accelerators to China, thereby violating the terms of the original agreement. As a result, on September 15, 2025, after nine months of official investigations, SAMR announced that the Nvidia acquisition of Mellanox violated the country's anti-monopoly law, an announcement that precipitated a 2% drop in Nvidia shares by the close of market. Moreover, under China’s anti-monopoly regulations, the company could be fined 1-10% of its annual revenue. “We comply with the law in all respects,” an Nvidia spokesperson said in a statement. “We will continue to cooperate with all relevant government agencies as they evaluate the impact of export controls on competition in the commercial markets.”
In fact, the main reason for Nvidia stopping sales in China was due to pressure from the U.S. government. In April 2025, the U.S. began to require a special license for certain companies to export technology goods to China. For Nvidia, the new license costs 13% of its revenues made in China. China itself has imposed its own trade policies against Nvidia that are damaging Nvidia’s business. Since 2020, SAMR has been bearing down on tech firms for not disclosing plans for business mergers and acquisitions in either a timely or forthright manner, and/or expressing publicly their anti-government stance on monopolies. On Wednesday, September 17, 2025, the Cyberspace Administration of China (CAC) ordered that all large tech firms in China cancel any orders from Nvidia and refrain from buying from it in the future. This decree worsens Nvidia’s situation as it faces the real threat of losing the Chinese market, which will deal a huge blow to its revenues.
In other words, Nvidia is in a class by itself with regard to the current investigations, as it is not its own internal decision-making that has prompted the scrutiny, but rather a shift in the broader political arena. Rather than being disciplined for undisclosed dealings, it is being punished for its affiliation with the US.
The bottom line is that this announcement does nothing to protect consumers, which is the core reason for anti-monopoly laws. It is vengeful rather than protective, and Nvidia finds itself a pawn in the current trade wars. Better oversight and guidelines are needed to ensure that international companies such as Nvidia are not just torn apart by facing pressures from both countries amidst their trade war, and that consumers, above all else, are protected during this economic conflict.