TikTok Deal Approved by President Trump to Secure U.S. Operations
President Donald Trump signed an executive order on Thursday endorsing a proposed transaction designed to preserve TikTok’s presence in the United States. The deal, valued at approximately $14 billion according to Vice President JD Vance, aims to satisfy national security concerns by restructuring TikTok’s ownership and operational control within the U.S. market.
Deal Structure and Ownership Breakdown
The executive order requires ByteDance, TikTok’s China-based parent company, to divest its U.S. operations or face a ban under applicable national security legislation. Under the terms, which still require approval from the Chinese government, a newly formed joint venture will manage TikTok’s U.S. business. ByteDance will retain less than a 20% equity stake in this entity.
- Oracle, Silver Lake, and Abu Dhabi’s MGX investment fund will collectively hold approximately 45% of the U.S. operation’s shares.
- ByteDance investors, including General Atlantic, Susquehanna, and Sequoia, alongside new stakeholders, will own about 35%.
Oracle’s role extends beyond investment, as the company will oversee TikTok’s U.S. security operations and continue providing cloud computing services. Oracle CEO Larry Ellison is a key figure in the ownership group, emphasizing the American-led management of the platform moving forward.
“It’s owned by Americans, and very sophisticated Americans,” President Trump stated during the signing ceremony. “This is going to be American operated all the way.”
Regulatory and Political Context
The transaction emerges amidst ongoing U.S. national security concerns regarding TikTok’s Chinese ownership. The executive order also suspends enforcement of a national security law until December 16, which otherwise would penalize app store operators and internet service providers for supporting TikTok’s U.S. operations. President Trump indicated that Chinese President Xi Jinping has given the deal preliminary approval, although ByteDance has not publicly confirmed the transaction. The Chinese government’s consent remains a critical hurdle for the deal’s completion. Additionally, conservative media figures Rupert Murdoch and his son Lachlan Murdoch, as well as Michael Dell of Dell Technologies, have been mentioned as potential participants in the ownership group, suggesting further American investment and influence.
Valuation and Market Implications
The deal values TikTok’s U.S. operations at $14 billion, a figure substantially lower than previous market estimates, which ranged between $30 billion and $35 billion. ByteDance itself was recently valued at approximately $330 billion. Importantly, the federal government will not acquire an equity stake or a so-called golden share in TikTok’s U.S. entity, preserving the company’s private sector control.
FinOracleAI — Market View
The approval of TikTok’s restructuring deal underlines the balancing act between national security concerns and economic interests in U.S.-China tech relations. The involvement of prominent American investors and firms like Oracle signals a strategic shift towards greater U.S. control and oversight.
- Opportunities: Enhanced data security through American operational control; sustained access to TikTok’s significant U.S. user base; potential for increased investment and innovation under new ownership.
- Risks: Dependence on Chinese government approval creates uncertainty; valuation mismatch may lead to future renegotiations; ongoing regulatory scrutiny could impact operational flexibility.
Impact: This executive order mitigates immediate risks of TikTok’s U.S. ban, stabilizing market sentiment and reinforcing U.S. influence over a major social media platform amid geopolitical tensions.
