Today, President Donald Trump has issued an executive order. By taking this action, the United States accepts a proposal to allow TikTok to continue doing business here. This decision is made under the shadow of considerable national security suspicion of the app’s ownership given its Chinese ownership and that of its parent company, ByteDance. The agreement is said to value TikTok’s U.S. operations at approximately $14 billion. This action is the fulfillment of a national security statute that necessitated ByteDance divest its U.S. operations or face a ban.
That newly created joint-venture company will be responsible for TikTok’s U.S. business, making sure that TikTok can continue to operate in the U.S. under American ownership. According to the terms of the agreement, ByteDance will own no more than a 20% stake in this new entity. This new structure addresses growing fears regarding the privacy and security of our data. It gives power back to American investors, giving them control of the world’s most popular social media platform.
President Trump emphasized the American ownership aspect of the deal, stating, “It’s owned by Americans, and very sophisticated Americans.” This statement highlights the administration’s focus on ensuring that U.S. interests are prioritized in the management and operation of TikTok.
Involvement of high-profile investors such as Oracle, Silver Lake, and the Abu Dhabi-based MGX investment fund is crucial to this agreement. These public entities will together own a powerful 45% of the new entity. At the same time, ByteDance investors and other new stakeholders will hold about 35%, further complicating the ownership structure.
Yet the deal has not been rosy sailing. Despite massive domestic and international pressure, the Chinese government first resisted key provisions of the agreement, before later agreeing to them. More recently, President Trump has indicated that Chinese President Xi Jinping personally approved the terms, helping to break the last stand-off.
Speculation continues to buzz about the potential role of media baron Rupert Murdoch and his son Lachlan. Other tech entrepreneurs Ellison and Michael Dell are under consideration in this interesting scenario. Their involvement might add more talent, capacity, or funding to the endeavor.
Meanwhile, President Trump has granted ByteDance an extension to sell its U.S. operations. This allows the company significantly more time to ensure an amicable transition as discussions persist. This extension is an acknowledgement of the difficult balance between keeping U.S. and Chinese interests aligned as TikTok’s future is decided.