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TikTok U.S. Operations Deal
President Donald Trump has signed an executive order to facilitate the transfer of TikTok's U.S. operations to a consortium of American investors.
“President Donald Trump signed an executive order allowing TikTok to continue operating in the U.S. by approving a deal for its U.S.-based operations to separate from its China-based owner, ByteDance.”
This action addresses national security concerns while allowing the app to continue operating in the U.S.
The deal, valued at approximately $14 billion, involves major investors such as Oracle and Silver Lake.
ByteDance will retain less than 20% ownership in the new arrangement.
This move is seen as a response to bipartisan legislation requiring apps controlled by foreign adversaries to divest their U.S. operations.
The executive order grants a 120-day extension for TikTok to operate while negotiations continue.
Approval from both U.S. and Chinese authorities is required for the deal to proceed.
U.S. Strategy on TikTok Security
The executive order is part of a broader strategy to mitigate perceived national security risks associated with Chinese technology companies.
The new U.S.-based entity will be majority-owned by American investors, with ByteDance holding a minority stake.
The deal includes licensing ByteDance’s algorithm to the U.S. joint venture, which will be retrained exclusively on U.S. data to prevent Chinese interference.
This arrangement aims to ensure U.S. control over TikTok’s algorithm and data security, a key concern for U.S. lawmakers.
Concerns Over Political Influence
The deal has sparked concerns about potential political influence due to the involvement of investors with ties to Trump, such as Oracle co-founder Larry Ellison and media mogul Rupert Murdoch.
“Notably, some investors have ties to Trump, such as Oracle co-founder Larry Ellison and media mogul Rupert Murdoch, raising concerns about potential political influence.”
The new board will be dominated by U.S. investors, with ByteDance having limited representation and being excluded from security matters.
This situation has raised questions about the extent of U.S. control and the possible political motivations behind the deal.
Challenges in TikTok Takeover
Despite the executive order, the legality and feasibility of the takeover remain uncertain.
Analysts note challenges in separating TikTok’s algorithm from ByteDance and the legal uncertainties about enforcing the deal.
The business is valued at $14 billion, lower than previous estimates, which has also raised questions about the financial aspects of the deal.
The arrangement requires approval from Beijing, adding another layer of complexity to the negotiations.