Trump’s Potential Tiktok Deal Takes Shape
President Trump seems to be making progress on a potential deal to prevent a Tiktok ban. Several prominent U.S. tech and investment firms are expected to take majority control of the China-based app.
Proposed terms indicate that a new entity will be formed by a group that includes billionaire Larry Ellison’s Oracle, Silver Lake, and Andreesen Horowitz to oversee Tiktok’s U.S. operations. This information comes from individuals familiar with the situation.
This new U.S. group is reportedly set to own about 80% of Tiktok, while Chinese investors would hold the remaining share. According to the Tiktok Selling Act, which was passed last year, China’s ownership stake can’t exceed 20%.
In a recent statement, Trump mentioned, “We’re doing business with Tiktok. I’ve made a deal with China. I’m going to speak with Chinese President Xi Jinping on Friday.” He noted that “these are very big companies that want to buy it.”
The new U.S. entity will be managed by an “America-controlled board,” including at least one person appointed by the Trump administration, as reported.
Current U.S.-based investors like Susquehanna, KKR, and General Atlantic are expected to be involved in managing the majority stake of Tiktok.
Some current investors are looking to “roll” their shares into this new U.S.-controlled entity to sidestep capital gains taxes. Nonetheless, questions have arisen regarding whether this shift would conflict with Congress’s limitation on Chinese ownership.
In an attempt to address concerns about Tiktok’s management, users are reportedly being encouraged to transition to a newer version of the app.
The app leverages technology licensed from its parent company, Bytedance, and U.S. user data is processed through Oracle’s servers.
Details of the contract were outlined by Chinese officials in Madrid amid ongoing trade negotiations between the Trump administration and Beijing. However, it’s uncertain whether these terms will be accepted, especially with skeptics in Congress aiming to prevent Beijing’s influence on Tiktok’s algorithm.
Michael Sobolik, a senior fellow at the Hudson Institute, has indicated that obtaining an algorithm license from Bytedance may violate existing laws.
On Tuesday, Trump issued an executive order delaying the enforcement of the sale law until December 16, marking yet another extension since the initial ban began in January.
The White House has been trying to temper speculation regarding the ongoing Tiktok deal. A senior official stated, “Details of the Tiktok framework are pure speculation unless published by this administration.”
Meanwhile, China’s state-run media has conveyed that a consensus has been reached with the U.S. on the Tiktok issue, emphasizing principles of mutual respect and cooperation.
