AsianFin -- China’s top competition watchdog has accused Nvidia, the world’s most valuable semiconductor company, of violating antitrust rules, escalating tensions between Washington and Beijing just as the two sides resume high-level trade talks in Europe.

The State Administration for Market Regulation (SAMR) said in a brief statement on Monday that a preliminary probe determined Nvidia had breached China’s Anti-Monopoly Law. The agency did not provide details but confirmed it would carry out “further investigation” into the U.S. chip giant.

The case centers on Nvidia’s $6.9 billion acquisition of Mellanox Technologies, an Israeli company specializing in network and data transmission, which was completed in 2019. While the deal was cleared by regulators in multiple jurisdictions at the time, Chinese officials have long signaled unease about its potential impact on competition.

Nvidia did not immediately respond to a request for comment.

Chinese regulators first disclosed last year that they were reviewing Nvidia for possible breaches tied to the Mellanox transaction. The latest announcement suggests Beijing is now intensifying its probe, even as Nvidia’s graphics processors remain critical to the global surge in artificial intelligence development.

The move underscores China’s growing determination to rein in foreign chipmakers’ dominance in areas it views as strategically important. Nvidia commands a near-monopoly in advanced AI chips, and its hardware is widely used across industries—from cloud computing to autonomous driving.

The decision also comes amid a broader clampdown on the U.S. semiconductor industry. On Saturday, China’s Ministry of Commerce announced it had launched an anti-dumping investigation into imports of certain analog integrated circuits from the United States. Those components—commonly produced by Texas Instruments and ON Semiconductor—are widely used in consumer electronics and industrial equipment.

The announcement comes as U.S. Treasury Secretary Scott Bessent meets Chinese Vice Premier He Lifeng in Madrid this week for a new round of negotiations on tariffs, technology access, and national security concerns tied to Chinese-owned social media app TikTok.

It marks the fourth set of talks in recent months, following sessions in London, Geneva, and Stockholm. To date, both governments have agreed to multiple 90-day pauses on tit-for-tat tariff escalations, avoiding a deeper trade war while maintaining pressure on one another.

But with chip technology increasingly at the heart of geopolitical competition, analysts warn progress could prove limited. “Semiconductors are no longer just a trade issue—they are a national security issue for both sides,” said Wang. “That makes compromise harder to reach.”

For Nvidia, the probe adds another layer of regulatory and political risk. The company, which briefly touched a $3 trillion valuation earlier this year, has already been targeted by U.S. export controls restricting sales of its most advanced chips to Chinese customers.