TikTok to operate in US under American business control
Donald Trump signed an executive order on Thursday outlining the terms of a deal to transfer TikTok to a US owner, The Guardian writes.
Trump said he and China’s president Xi Jinping had come to an agreement to allow TikTok to continue operating in the US, separating the social media platform from its Chinese owner ByteDance. Trump said the deal complies with a law that would have forced the shutdown of the app for American users had it not been divested and sold to a US owner.
Under the plan, US investors will take over the majority of TikTok’s operations and take charge of a licensed copy of the app’s powerful recommendation algorithm. American companies are expected to own about 80% of the US version of the spun off company, while ByteDance and Chinese investors will own less than 20%. The new version of TikTok will be controlled by a seven-member board of directors made up of cybersecurity and national security experts, six of them Americans, according to the White House.
The new US company will be valued at $14bn, according to JD Vance, who also spoke at the press conference, a number far lower than the valuation for ByteDance overall, which is estimated to be around $330bn. By comparison, Meta, which owns Facebook and Instagram, is valued at $1.8tn.
Along with Oracle and its co-founder Larry Ellison, Trump said at the press conference that other investors include media mogul Rupert Murdoch and the CEO of Dell computers Michael Dell.
The deal ends months of legal limbo for one of the US’s most widely used apps, while also giving several US companies a powerful newfound influence within the social media industry. TikTok is used by about 180 million people nationwide, and Trump has credited it with helping him win the 2024 presidential election.
TikTok has previously faced criticism from Congress and lawmakers over concerns about data security and the risk of Chinese influence. Last year, Congress required the app to be sold in the United States or face a ban. The Supreme Court upheld that decision.
Trump’s new executive order, dubbed “Saving TikTok,” states that the agreement resolves national security concerns. The deal is expected to close within about 120 days.
