China on Monday accused Nvidia of violating the country's antimonopoly laws and said it would step up scrutiny of the world's top chipmaker, heightening tensions with Washington as the two countries meet for trade talks this week.

Chinese regulators said they would carry out "further investigation" into Nvidia after a preliminary investigation found that the company breached regulations when it acquired network and data transmission company Mellanox for $6.9 billion in 2020.

Nvidia didn't respond immediately to a request for comment.

China's regulators had said last year that they were looking into suspected violations linked to the Mellanox acquisition. Shares of Nvidia declined $2.81, or 1.6%, to $175.01 in premarket trading on Monday.

The decision ratchets up pressure on the U.S. as officials from Washington hold trade talks in Spain with Beijing's representatives, and follows other moves by Beijing to increase scrutiny of the U.S. chip industry.

Antidumping investigation
On Saturday, China's Ministry of Commerce said it was carrying out an antidumping investigation into certain analog IC chips imported from the U.S., including commodity chips commonly made by companies such as Texas Instruments and ON Semiconductor.

The ministry also announced a separate antidiscrimination probe into U.S. measures against China's chip sector.

In talks scheduled to run from Sunday to Wednesday, U.S. Treasury Secretary Scott Bessent is meeting Chinese Vice Premier He Lifeng in Madrid for negotiations on tariffs and national security issues related to the ownership of social media platform TikTok.

It's the fourth round of discussions after meetings in London, Geneva and Stockholm. The two governments have agreed to several 90-day pauses on a series of increasing reciprocal tariffs, staving off an all-out trade war.

Santa Clara, Calif.-based Nvidia, the world's most valuable semiconductor maker, has become central to the U.S.-China trade war, as the two sides battle for tech supremacy.

The company has faced restrictions on chip exports to China imposed by President Joe Biden's administration that were then reinforced by President Donald Trump.

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