Key Points
- President Donald Trump has signed an executive order allowing TikTok to continue its operations in the United States under a new joint venture.
- The new US-based company will be majority-owned and controlled by American companies and investors, led by Oracle.
- Oracle will be responsible for securing all US user data and overseeing the app’s security with advanced technology.
- The deal, valued at around $14 billion, was approved after a conversation between President Trump and Chinese President Xi Jinping.
- Despite the agreement, concerns from lawmakers and experts persist over the actual control of TikTok’s core recommendation algorithm.
New Delhi: In a major development, President Donald Trump signed an executive order on Friday in Washington, D.C., officially approving a deal that allows the popular social media app TikTok to continue operating in the United States. The decision averts a long-threatened ban and establishes a new American-controlled joint venture to manage the app’s US presence. Speaking from the White House, Trump announced that the agreement was finalized after a “positive conversation” with Chinese President Xi Jinping, who he said also approved the arrangement.
A New American-Controlled Company
Under the terms of the executive order, TikTok’s US operations will be restructured into a new company established entirely within the United States. President Trump emphasized that this new entity will be majority-owned and controlled by American citizens and firms, a key demand to mitigate national security risks. “The app will now be operated by the best American companies and investors,” Trump stated. “Young people wanted this deal to happen, and we made it happen.”
Oracle, co-founded by Larry Ellison, is set to play a pivotal role. Trump confirmed, “Oracle and other American investors will operate TikTok and strengthen security with cutting-edge technology,” ensuring that American user data remains safe and is not accessible to foreign adversaries.
Structure of the Deal
The new American company has been valued at approximately $14 billion. Vice President J.D. Vance acknowledged this figure was lower than some market projections but stressed that the primary goal was achieved. “The goal was clear: to keep TikTok running while protecting citizens’ privacy,” Vance commented.
The ownership structure is designed to comply with the provisions of a 2024 law aimed at preventing foreign adversary control of critical technology. The breakdown is as follows:
- Oracle and Silver Lake will jointly hold a significant stake of approximately 50%.
- Existing ByteDance investors, including US-based firms like Susquehanna, General Atlantic, and KKR, will retain about 30% of the shares.
- ByteDance’s direct stake will be reduced to below 20% to ensure American majority control.
President Trump also mentioned that other major global investors, such as Michael Dell of Dell Technologies and Rupert Murdoch of Fox News and News Corp, will be involved.
Unresolved Questions and Calls for Transparency
Despite the White House’s declaration of victory, key questions remain, particularly concerning TikTok’s powerful recommendation algorithm. According to the order, the algorithm will be “redesigned and operated under the supervision of American security partners.” However, experts are skeptical about how much control the new US entity will truly have over this core technology, which was developed by ByteDance in China.
“While the president has approved the deal, the situation regarding the algorithm remains unclear,” noted Alan Rosenstein, a professor at the University of Minnesota. This sentiment is echoed by several Republican lawmakers, who are now demanding that the full details of the agreement be made public to ensure that Chinese influence has been completely eliminated and that the deal genuinely protects US national security interests.
