Executive Order Brings US TikTok $14B Deal One Step Closer to Finalizing
President Donald Trump issued an executive order on Thursday that provides legal backing for a group of U.S. investors to buy TikTok, allowing the app to continue operating within the country. About 170 million Americans use TikTok.
“The divestiture removes the TikTok application and certain other applications from the control of a foreign adversary, as defined under the Act,” the Executive Order reads.
The Act referenced in the EO is the 2024 Protecting Americans from Foreign Adversary Controlled Applications Act, which was specifically made to apply to TikTok owner ByteDance Ltd. The Act said such an application must be divested or banned if it constitutes a national security threat.
The deal is not yet finalized, and the Chinese government would also need to approve it.
On Thursday, Trump stated that Chinese President Xi Jinping had agreed to the deal, but he did not provide details. China has not independently confirmed.
Security management of the U.S. version of TikTok
Under the current plan, Andreessen Horowitz, Oracle, and Silver Lake will participate in a joint venture that uses a licensed, U.S.-retrained copy of TikTok’s algorithm and oversees data protections, while Oracle will host user data and support algorithm retraining, application development, and source-code review. This approach is intended to meet the requirements of the 2024 Act.
ByteDance would hold a stake of less than 20% in the new TikTok venture going forward. The U.S. investors would hold the remaining 80% and control the board. ByteDance would have one representative on the board, who would not contribute to security-related decisions.
“The divestiture includes intense monitoring of software updates, algorithms, and data flows by the United States’ trusted security partners, and it requires all recommendation models, including algorithms, that use United States user data to be retrained and monitored by those trusted security partners,” the Executive Order reads.
Dell founder Michael Dell is also investing in the U.S. spinoff of TikTok, Trump said.
According to Vice President JD Vance, the TikTok deal is valued at about $14 billion.
TikTok investigation began in 2019
TikTok has been a topic of political scrutiny since 2019, when Senate Minority Leader Chuck Schumer and Senator Tom Cotton requested a national security investigation into potential censorship of content and the collection of U.S. user data. Legislation passed by Congress under former President Joe Biden ruled TikTok could only operate in the US under American ownership.
The Associated Press noted that reaching a deal regarding TikTok would help maintain open lines of communication between China and the US for more significant trade negotiations.
ByteDance will continue to operate TikTok outside the US.
Elsewhere, the European Commission is investigating SAP’s Enterprise Resource Planning (ERP) system for potentially restricting competition.
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