On Thursday, Donald Trump signed an executive order outlining the terms for the transaction that will transfer ownership of TikTok to US-based owners.
Trump announced that he and Chinese President Xi Jinping had reached a consensus to dissociate the popular social media platform from Chinese ownership, allowing TikTok to continue its operations in the US. He stated that the deal aligns with existing laws that mandate the closure of apps targeting American users unless they are sold to US entities.
“I spoke with President Xi, and he said, ‘Please proceed with that,'” Trump mentioned at a press briefing. “This will always be manipulated in America.”
Under this new arrangement, American investors are expected to acquire the majority of TikTok’s business and will manage the licensed versions of the app’s robust recommendation algorithms. It is anticipated that US entities will hold around 80% of the new spinoff company, with ByteDance and Chinese investors retaining less than 20%. The White House stated that the revamped TikTok will be governed by a seven-member board, composed mainly of American cybersecurity and national security specialists.
JD Vance reported that the new US entity is projected to be valued at $14 billion. He also indicated at the press conference that its estimated valuation is approximately $330 billion, in contrast to Meta, the parent company of Facebook and Instagram, which is estimated at $1.8 trillion.
Leading the group of American TikTok investors is Oracle, a US software giant, which will manage TikTok’s US functions, provide cloud computing for user data storage, and oversee app algorithm licenses. According to White House officials, ByteDance and Chinese authorities will not have access to US user data.
In addition to Oracle and its co-founder Larry Ellison, Trump mentioned that notable investors include media tycoon Rupert Murdoch and the CEO of Dell Technologies. “Great investors. The biggest. They’re not going to get bigger,” Trump stated. Vance noted that details regarding the transaction participants will be disclosed in the upcoming days.
When asked if TikTok would prioritize MAGA-oriented content, Trump responded, “I’ve always liked MAGA-related content, and I could be 100% MAGA-related if feasible,” but emphasized that the app would still promote a diverse range of content, affirming, “All groups will be treated fairly.”
This agreement has been under legal scrutiny for several months and represents a significant shift in the US social media landscape, giving domestic companies increased influence in the industry. TikTok currently has about 180 million users in the United States, and Trump believes it will aid his bid for the 2024 presidential election. This move is part of Trump’s administration’s broader strategy to gain leverage in the tech sector, having recently acquired a 10% stake in chip manufacturer Intel, prompting major companies like Apple and Nvidia to invest significantly domestically.
Trump had previously mentioned that the US government would receive favorable fees from US investors in negotiating deals with China. Last week, he stated: “The US is getting a very paid plus – I call it a paid – just to make a deal.”
However, when pressed on this matter, the president simply stated that the US would collect standard taxes from the new company, adding, “We’re going to make money; we’re going to earn a lot from taxes.”
TikTok has faced bipartisan opposition from lawmakers concerning data privacy and allegations of using the app to spread propaganda or undermine American democracy. Although TikTok has consistently denied these accusations, Congress overwhelmingly voted last year to compel the company to find a US buyer or face a domestic ban.
In January, the Supreme Court unanimously upheld the ban. On his first day in office, Trump issued an executive order delaying the prohibition and subsequently postponed its enforcement. The “TikTok savings” Presidential order Trump signed on Thursday asserted that the agreement conformed to laws established by Congress and represented a “qualified sale” that addressed national security concerns. The agreement is not expected to be finalized for another 120 days.
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At the press conference, Trump mentioned that “young people” were rooting for him to “save TikTok.” He believes he was inspired by Charlie Kirk, a conservative activist who recently encouraged him to engage with social media platforms.
“Charlie was very helpful to me. He said, ‘We should go to TikTok,'” Trump recounted.
Last week, US Treasury Secretary Scott Bescent announced that the US and China had established a trading framework following extensive discussions in Madrid, pivoting on TikTok’s future. China’s chief trade negotiator, Li Chengang, later confirmed the agreement and cautioned against US attempts to “control” Chinese firms.
Trump also alluded to the deal last week but refrained from divulging specific details.
“We’ve also reached agreements concerning “specific” companies that the youth in our nation are eager to see preserved. They will be quite pleased!” he posted on Truth Social.
Source: www.theguardian.com
