TikTok Sale Approved: Trump Signs Executive Order Allowing American Investor Group to Acquire U.S. Operations for $14 Billion
A Chinese-owned app, TikTok, has faced considerable scrutiny in the U.S. over concerns about potential user data access by the Chinese government for four years. The platform’s American users have frequently found themselves in the crosshairs of this tension, as evident in its recent temporary outage in the U.S., which left millions of users anxious before it was restored.
The app reappeared on both the App Store and Google Play Store in February. As multiple investors vie for ownership, the latest extension of the TikTok ban deadline by President Trump suggests that a sale is imminent.
On Thursday, President Trump signed an executive order endorsing the acquisition of TikTok’s U.S. operations by an American investor group. The deal values TikTok US at approximately $14 billion, according to Vice President JD Vance. If the deal goes through, CFRA Research’s senior vice president, Angelo Zino, predicts that the platform’s U.S. business could see its valuation surge beyond $60 billion.
A week prior, Trump announced that President Xi Jinping of China had given his approval for a TikTok deal, allowing a consortium of American investors to manage the platform. ByteDance has publicly stated its commitment to maintaining the platform’s availability for American users.
Recent reports suggest that a “framework” deal has been established between the U.S. and China. The potential investor group may consist of Oracle, Silver Lake, Andreessen Horowitz, among others, who could oversee TikTok’s U.S. operations, owning an estimated 80% stake. The remaining shares will belong to Chinese stakeholders. The new entity’s board is expected to be predominantly comprised of American members, with one appointee from the U.S. government.
Rumors suggest that Rupert Murdoch and his son Lachlan, Oracle’s executive chairman Larry Ellison, and Dell Technologies CEO Michael Dell may play significant roles in the deal. It is anticipated that Oracle will handle security and safety measures for the app, as they already provide cloud services for TikTok and manage user data within the U.S.
Oracle has previously expressed interest in acquiring TikTok, and, according to a White House official, would be responsible for replicating and securing a new U.S. version of the algorithm. The U.S.-based TikTok owners could lease this algorithm from ByteDance, which Oracle will then train.
ByteDance will have no access to information about TikTok’s U.S. users or influence over the U.S. algorithm under the proposed arrangement.
Although details remain unclear, reports suggest that when the deal is finalized, the TikTok app may cease operation in the U.S., requiring users to transition to a new platform. The specifics of this platform, including its features and differences from the original app, are yet to be revealed.
To delve deeper into this high-stakes saga, we’ll examine TikTok’s contentious relationship with the U.S. government, which has culminated in various legal battles and negotiations since August 2020.
The drama commenced when Trump issued an executive order banning transactions with parent company ByteDance. A month later, his administration sought to force a sale of TikTok’s U.S. operations to a U.S.-based firm. The leading contenders included Microsoft, Oracle, and Walmart. However, a U.S. judge momentarily halted Trump’s executive order, allowing TikTok to continue operation while the legal battle unfolded.
Progress accelerated during the transition to the Biden administration. After the Senate passed the bill against TikTok, President Joe Biden signed it into law.
In response, TikTok sued the U.S. government, challenging the legality of the ban and arguing that the app and its American users were infringing upon their First Amendment rights. The company has consistently denied posing a security threat, asserting that its data stored in the U.S. complies with all local laws.
Currently, Trump appears to have changed his stance since his first term, seeking a 50-50 ownership arrangement between ByteDance and a U.S. company. Several contenders have emerged, including consortiums organized by Project Liberty founder Frank McCourt and Employer.com founder Jesse Tinsley, among others. The specifics of the acquisition are still under negotiation.
