On Thursday, former President Donald Trump officially signed an executive order detailing the terms of a significant deal to transfer TikTok ownership to a US-based entity. This decision comes after negotiations with China's President Xi Jinping, resulting in an agreement that allows TikTok to continue its operations in the United States, effectively separating the popular social media platform from its Chinese parent company, ByteDance.
Trump emphasized that this deal adheres to a law that would have mandated the shutdown of TikTok for American users had it not been sold to a US owner. The plan outlines that American investors will assume control of the majority of TikTok's operations and will also manage a licensed version of the app's highly influential recommendation algorithm. According to the deal, approximately 80% of the newly formed US version of the company will be owned by American interests, while ByteDance and other Chinese investors will retain less than 20%.
The restructured TikTok will be governed by a seven-member board of directors, which will include experts in cybersecurity and national security, with six members being American citizens, as outlined by the White House. The leading American investor group in this venture is spearheaded by the renowned US software giant Oracle, which is tasked with overseeing TikTok's operations in the US, providing cloud services for user data storage, and acquiring a license to manage the app's critical algorithm.
White House officials have assured that ByteDance and Chinese authorities will not have access to the data of US users, addressing previous concerns regarding data privacy. Alongside Oracle and its co-founder Larry Ellison, other notable investors in the consortium include the private equity firm Silver Lake, media magnate Rupert Murdoch and his son Lachlan, as well as Michael Dell, the CEO of Dell Technologies.
Trump stated that he had a productive conversation with Xi over the phone, expressing optimism about the deal. "The call was a very good one, we will be speaking again by phone, appreciate the TikTok approval, and both look forward to meeting at APEC!" he shared on his social media platform, Truth Social.
This tentative agreement marks a turning point for TikTok, ending months of uncertainty for one of the most widely used apps in the US, which boasts approximately 180 million users. Trump has previously credited TikTok with playing a crucial role in his campaign for the 2024 presidential election. The deal also signifies a continued effort by the Trump administration to exert influence over the tech industry, following a recent 10% investment in chipmaker Intel and urging major companies like Apple and Nvidia to invest heavily in domestic operations.
As part of the negotiations surrounding TikTok, the US government is anticipated to collect a multibillion-dollar fee from the group of investors involved, as reported by the Wall Street Journal. "The United States is getting a tremendous fee-plus—I call it a fee-plus—for just making the deal," Trump remarked during a press conference in England last week. "And I don’t want to throw that out the window."
TikTok has faced bipartisan scrutiny from lawmakers over data privacy issues and allegations that China could exploit the app to disseminate propaganda or undermine US democracy. Despite TikTok's repeated denials of these claims, Congress overwhelmingly voted last year to compel ByteDance to seek a US buyer or face a ban in the country. The Supreme Court upheld this ban unanimously in January.
On his first day in office, Trump signed an executive order postponing the ban and has since delayed its enforcement multiple times. Just last week, US Treasury Secretary Scott Bessent announced a framework for the TikTok deal following high-level discussions in Madrid. China’s lead trade negotiator, Li Chengang, confirmed the agreement while cautioning against any attempts by the US to suppress Chinese companies. Although Trump hinted at the deal last week, he refrained from disclosing specific details.
