Topline
President Donald Trump signed an executive order on Thursday to finalize a deal between the U.S. and TikTok’s Chinese leadership, setting up a path for the social media app to be owned by a trio or more of wealthy American investors—and all major Trump supporters.
The White House has said a deal is expected to be signed with China “in the coming days,” as multiple Trump-supporting billionaires—Larry Ellison, Marc Andreessen, Lachlan Murdoch—may be involved.
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Key Facts
Trump signed the order in the Oval Office, with Vice President JD Vance saying American TikTok users can use the app “with more confidence than they had in the past because their data’s going to be secure,” referring to national security concerns about TikTok’s Chinese ownership.
Trump said billionaire media mogul Rupert Murdoch and Dell CEO Michael Dell are part of “four to five absolutely world class investors” involved in the deal.
Vance said the deal values the company at $14 billion.
Further details on the deal’s investors and terms are still unclear, though Vance said more information on it will be released “in the coming days.”
As part of a ban approved by Congress in April 2024, ByteDance, TikTok’s China-based owners, are required to divest from the social media app or face a ban in the U.S., though Trump has extended a deadline for ByteDance to do so multiple times.
TikTok is the third-most popular social media app in the U.S. by audience on desktop or mobile with roughly 124.7 million users in August, below Facebook’s 137.3 million and YouTube’s 162.5 million, according to estimates from Similarweb’s digital intelligence services.
Who Could Control Tiktok?
Americans will hold six of seven board seats for TikTok’s U.S. entity as part of the deal, according to White House Press Secretary Karoline Leavitt. Oracle, the cloud computing firm headed by billionaire Larry Ellison, would lead TikTok’s “data and privacy” and store data across its facilities in the U.S., preventing access from China, Leavitt said. Oracle, Silver Lake and Abu Dhabi investment firm MGX are expected to be the three main shareholders with a roughly 45% stake, CNBC reported. ByteDance’s existing U.S. investors, including Susquehanna International, KKR and General Atlantic, are also expected to hold equity, while ByteDance will hold roughly 20% of shares. Trump has suggested Lachlan Murdoch, Rupert Murdoch’s heir, might also be tied to the deal, adding, “Rupert is probably going to be in the group, I think they’re going to be in the group.”
Tangent
The same law requiring ByteDance to sell TikTok or have the app banned in the U.S. applies to other ByteDance apps including CapCut, AI homework helper Gauth and lifestyle app Lemon8. The remaining ByteDance apps are included in the framework of the deal, according to Thursday’s executive order.
What Happens To Tiktok’s Addictive Recommendation Algorithm?
ByteDance will copy TikTok’s recommendation algorithm and lease it to the U.S. entity as part of the deal, the Journal reported, citing a White House official. The company, under the supervision of Oracle and the U.S. government, would then replicate the algorithm for U.S.-based users.
What Has China Said About The Tiktok Deal?
Trump thanked Chinese President Xi Jinping for “the TikTok approval” last week, indicating they made “progress on many very important issues” in a recent phone call. China’s foreign ministry, in a follow-up statement to Trump’s call with Xi, did not explicitly say whether Xi had approved the deal, however. The ministry noted the Chinese government “respects corporate decisions and welcomes business negotiations that follow market rules and produce solutions consistent with Chinese laws and balanced interests.” In the call, Xi requested Trump to avoid imposing “unilateral trade restrictions” on China, according to the statement. Leavitt said the Trump administration is “100% confident” China will give final approval.
Why Was Tiktok Banned In The U.s.?
President Joe Biden signed a ban on TikTok in the U.S. into law last year, following years of bipartisan scrutiny over the app amid data privacy concerns and alleged links to the Chinese government. Forbes has previously reported TikTok spied on journalists, promoted Chinese propaganda on the app, mishandled personal user information like Social Security numbers and tracked “sensitive words.” TikTok has denied any wrongdoing and having any links to the Chinese government, claiming in a lawsuit the ban violates its First Amendment rights. TikTok has said a ban was “simply not possible: not commercially, not technologically, not legally.” The Supreme Court upheld the ban in January, ruling the law does not violate the First Amendment rights of the app and upholding the federal government’s national security concerns.
Further Reading
ForbesTrump Says China Gave ‘Approval’ For TikTok DealBy Ty Roush
ForbesTrump Suggests TikTok ‘Deal’ Reached With China —What To KnowBy Alison Durkee
