The GPU supplier got a nasty surprise when China’s antitrust regulator suddenly announced a probe into a dusty, five-year-old Nvidia acquisition. The timing was no coincidence as US Treasury Secretary Scott Bessent had just wrapped TikTok talks in Madrid.

People who advise Beijing’s officials said the move was designed to send a clear message that China still has leverage over America’s most valuable tech darling and others like it.

Three years ago China made up a fifth of Nvidia’s revenue. That has since collapsed to just six per cent thanks to US export bans.

According to the Wall Street Journal, Beijing knows its tech firms still desperately need Nvidia’s silicon. The US company is even working on a Blackwell-based chip tuned for Chinese customers to power AI projects in banking and manufacturing. If Trump blocks sales, Chinese firms lose out too.

Vice premier He Lifeng used the Madrid meeting to demand the scrapping of tariffs and export controls, but the Trump side refused. US negotiators countered with their own threats, telling Beijing there would be no Trump–Xi summit without a TikTok agreement, and hinting Trump could shut the app entirely.

China’s top cyberspace regulator, deputy director Wang Jingtao, told reporters in Madrid: “Both sides have reached a basic consensus on resolving the TikTok issue.”

Under the draft deal, a consortium of American investors would take a majority stake in a new TikTok US business, with Oracle hosting the data. Users would be shuffled onto a rebranded app that ByteDance has been testing.

China had earlier bristled at the idea of US control over TikTok’s crown jewel algorithm, but Wang said Beijing was now willing to “license the use of TikTok’s algorithm and other intellectual property rights.”

ByteDance’s internal valuation has ballooned to $330 billion (€307 billion) after a share buyback, giving the Chinese firm more reason to play hardball.