 "China targeting Nvidia as Trump shields TikTok: Xi pushing to cast Beijing as US tech supplier")
Negotiations between the US and China appear close to producing a framework that would keep TikTok operational in America. According to US and Chinese officials, the deal would involve a consortium of American investors taking a majority stake in a newly created TikTok US entity, while ByteDance, TikTok’s Chinese parent, would license its core algorithm to the new company.
The arrangement would allow TikTok to continue running under US oversight while retaining elements of its Chinese technology. Oracle, which already hosts US TikTok user data, is expected to play a role in safeguarding the platform’s operations, Financial Times reported.
For US President Donald Trump, the agreement would preserve access to a hugely popular app, particularly among younger voters, while enabling him to claim that US security concerns had been addressed.
For Beijing, the deal signals that China’s technology can be exported on commercial terms, positioning the country not only as a consumer of Western innovation but as a supplier of key digital infrastructure, Wall Street Journal reported.
Beijing leverages Nvidia amid talks
Just as US Treasury Secretary Scott Bessent was finalising details of the TikTok negotiations in Madrid, Beijing delivered an unexpected message. China’s State Administration for Market Regulation (SAMR) announced that Nvidia, the US-based leader in artificial intelligence chips, had violated the country’s anti-monopoly law in relation to its 2020 acquisition of Mellanox, an Israeli networking company, CNBC reported.
The regulator stated that a preliminary probe had uncovered violations, although it did not specify what conditions Nvidia had breached. Nvidia responded by saying it complies with laws in all jurisdictions and would cooperate with relevant authorities.
The timing of the announcement was no coincidence. The move showed Beijing’s ability to apply pressure on American firms with critical exposure to China’s market, even as it pursued concessions in broader trade and technology negotiations.
Impact Shorts
More ShortsLimited leverage against Nvidia
While the antitrust investigation signals intent, Beijing’s practical leverage over Nvidia is not unlimited. Only three years ago, China accounted for about one-fifth of Nvidia’s revenue. Export restrictions imposed by the Biden administration and maintained under Trump have since reduced that figure to about 6 per cent, Wall Street Journal said.
Nvidia’s order book is now largely filled by demand from American and allied markets, especially amid the rapid global buildout of artificial intelligence systems. Industry insiders argue that China’s options for pressuring the company are constrained, given that its domestic firms remain dependent on Nvidia chips to advance applications in areas ranging from manufacturing to financial services.
In fact, Nvidia has been designing a chip tailored for the Chinese market, based on its Blackwell architecture, that would allow local companies to expand AI capabilities without violating US export controls. If escalating tensions prevent the product’s release, Chinese companies could face short-term disadvantages in their race to compete with American firms.
Xi’s push to position China as tech exporter
Beyond the immediate tug-of-war, the developments reflect a broader strategic ambition from Beijing. By agreeing in principle to license TikTok’s algorithm to the US entity, China is seeking to frame itself not only as a recipient of Western technologies but as an exporter of valuable intellectual property.
Wang Jingtao, deputy head of China’s cyberspace regulator, confirmed that both sides had reached a basic consensus on the TikTok issue. He noted that Beijing was prepared to authorise the licensing of the recommendation algorithm and other intellectual property rights, Wall Street Journal said in a report.
An Asia-based investor in ByteDance remarked that the US app would likely train the algorithm using American user data, but the foundation would remain Chinese.
This positioning allows Xi Jinping to present China as a global technology supplier, reinforcing his domestic narrative that the country is not simply dependent on Western innovations but capable of exporting its own breakthroughs.
US resistance on tariffs and controls
Chinese negotiators reportedly pressed for broader concessions during the Madrid talks. Vice Premier He Lifeng called for the removal of tariffs and export restrictions on Chinese goods and technology. The US team, however, refused to compromise insisting that such measures were not up for discussion at this stage.
Instead, American negotiators emphasised their own leverage. They warned that if no agreement was reached on TikTok, Trump could shut down the app entirely. They also indicated that a potential meeting between Xi and Trump—something Beijing has been pushing for—would only happen if the TikTok deal were finalised.
The current framework suggests that Trump will retain significant discretion. Under a US law signed during the Biden administration, ByteDance is required to divest TikTok’s American operations or face a ban. However, the law also gives the US president the authority to determine whether a proposed structure meets the divestment requirement, leaving Trump with the final word.
Geopolitical symbolism
For Xi, securing a Trump visit to Beijing could carry significant symbolic weight. The Chinese leader recently presided over a high-profile military parade alongside Russian President Vladimir Putin and North Korean leader Kim Jong Un.
Hosting the American president soon afterward would allow Xi to portray China as a central player on the world stage capable of drawing both rivals and allies to its capital.
For Trump, maintaining TikTok’s availability could bolster his appeal among younger voters while showcasing his ability to strike deals with China without fully lifting tariffs or easing technology restrictions. Both leaders appear to be seeking outcomes that serve their domestic narratives, even as underlying economic disputes remain unresolved.
Rising uncertainty for global tech
The parallel targeting of TikTok and Nvidia highlights the broader uncertainty facing global technology companies caught between Washington and Beijing. China has already opened two additional probes into US semiconductor firms: one for anti-dumping and another examining alleged discriminatory practices linked to US export restrictions.
Meanwhile, Nvidia has faced repeated disruptions to its China strategy. A specially designed chip intended to comply with US export rules was blocked earlier this year from being shipped to China.
Company executives, including CEO Jensen Huang, have publicly argued that American firms should be allowed to serve China’s growing AI market, which Huang has estimated could reach $50 billion within a few years.
Washington has allowed some compromises, including a deal under which Nvidia could resume certain sales to China in exchange for giving up a portion of the revenue to the US government. But the company’s long-term prospects in the country remain clouded by policy uncertainty.
As trade talks progress, companies at the centre of the standoff—whether TikTok, Nvidia or others—remain vulnerable to the shifting calculations of two governments that increasingly view technological dominance as central to their strategic rivalry.
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