China's antitrust regulator has found Nvidia in violation of the country's anti-monopoly law and will continue its investigation, potentially leading to penalties for the US chipmaker, reported Reuters.

The State Administration for Market Regulation (SAMR) said Nvidia breached both antitrust rules and conditions set by the Chinese government when it approved the company's 2019 acquisition of Israeli firm Mellanox Technologies.

The US$6.9 billion deal was conditionally approved by China in April 2020. Under the terms, Nvidia was required to supply graphics processing units and interconnect products to Chinese customers on fair, reasonable, and non-discriminatory principles - and maintain hardware compatibility.

SAMR launched its investigation in December and said on Monday that the probe would continue. No further details were provided. The case comes amid rising technology tensions between China and the US.