America has a curious habit: when it can’t figure out whether to ban a thing or bless it, it sells it to a friend and calls the problem solved. TikTok was supposed to be a menace, a spyglass for Beijing, a digital opium pipe corrupting the youth. But instead of pulling the plug, Washington stitched up a deal that turned a “national security threat” into a business opportunity for billionaires. The kids keep their dances, the moguls keep their profits, and the politicians keep their talking points. That’s what passes for compromise these days.
Painted red, white, and blue, it is still humming the same algorithmic tune. The government swears it’s safer, Oracle swears it’s smarter, and the young swear they couldn’t live without it. Maybe they’re all right. Or maybe it’s just another sleight of hand where power changes suits but never leaves the casino. In the end, the app that was almost banned will keep us scrolling, laughing, buying, and arguing, while the real winners cash out quietly in the back room.
Here’s a more detailed and critical take on the TikTok deal as described in that transcript + recent reporting, with what the structure seems to be, its implications, and open questions / concerns:
TikTok deal and executive order
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Trump said he reached an agreement with President Xi allowing American investors (Larry Ellison/Oracle, Michael Dell, Rupert Murdoch, etc.) to take over U.S. operations of TikTok.
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Oracle would handle U.S. data security.
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The U.S. entity would control the algorithm, with claims it won’t be used for propaganda.
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The company was valued around $14 billion in the deal as described.
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Trump emphasized he used TikTok during the campaign and that young voters “loved it.”
Structure & Key Terms (as reported)
From the transcript and news sources, this is how the deal is being framed:
| Component | What’s being proposed / claimed | Supporting reports |
|---|---|---|
| Valuation | ~$14 billion for TikTok’s U.S. operations (i.e. the “new U.S. entity”) | FT: “TikTok US to be valued at $14bn” (Financial Times) |
| Ownership split | U.S. investors (Oracle, Silver Lake, MGX, etc.) will control ~ 45 % (some reports say ~80 %) of the new U.S. company; ByteDance retains a minority stake (~ 19.9 %) | Reuters: “Oracle, Silver Lake … will acquire ~ 50 %” (Reuters) ; FT: “jointly control ~45 % … ByteDance will retain 19.9%” (Financial Times) ; WSJ / Reuters earlier: U.S. investors ~80% stake, Chinese shareholders below 20% (Reuters) |
| Board / governance | Six of seven board seats will go to Americans; ByteDance picks one. ByteDance is excluded from security decisions. | Reuters: new board with 6 American-appointed and 1 by ByteDance. (Reuters) ; FT: says algorithm & security under U.S. control. (Financial Times) |
| Control of algorithm / content / data | – The U.S. entity will control the algorithm for U.S. users (or have oversight) – TikTok’s algorithm (or a version of it) will be licensed or transferred to the new U.S. entity – U.S. user data will be stored on servers in the U.S. and managed by Oracle as the “trusted security provider” – ByteDance no longer has access to algorithmic or security control | AP: “a copy of TikTok’s algorithm will be given to the joint venture … fully inspected and retrained … then operated by that U.S. entity.” (AP News) ; Washington Post: algorithm will still be leased, adapted with U.S. data. (The Washington Post) ; Politico: U.S. will control algorithm under deal. (Politico) ; OPB/AP: Oracle will manage the algorithm. (opb) |
| Timeline & deadline | A 120-day window is given to finalize and implement the deal. | FT: executive order gives 120 days to finalize. (Financial Times) |
| Role of China / approval | Trump says he talked to President Xi, and China “approved” the deal. But resistance is reported, and China formally agreeing is still uncertain. | FT: “he talked with President Xi … gave us the go-ahead” (Financial Times) ; Reuters: Chinese side had resistance. (Reuters) |
| Other investors / participants | – Oracle (Larry Ellison) – Silver Lake – MGX (Abu Dhabi’s AI/investment arm) – Michael Dell (Dell Technologies) – Rupert Murdoch / Lachlan Murdoch – Some existing ByteDance investors (e.g. General Atlantic, Susquehanna) may retain stakes – Possibly Andreessen Horowitz, others | Several sources mention Oracle, Silver Lake, MGX. (Financial Times) ; Trump mentions Dell, Murdoch in speech. In news: “Michael Dell is part of the consortium” (The Register) ; Murdoch involvement: Trump says Murdochs may be in group. (TechCrunch) ; Engadget: includes Andreessen Horowitz etc. (Engadget) |
| Government / U.S. role | – The U.S. government will not hold equity or a “golden share” – It will not select a board seat itself – The transaction is framed as a “qualified divestiture” aligned with U.S. law – The executive order extends the moratorium on banning TikTok for 120 days to make the deal happen | White House official: no golden share, no board seat for U.S. government. (Anadolu Ajansı) ; FT/News: deal structured to comply with law banning TikTok if Chinese ownership remains. (Financial Times) |
Why this structure, and what problem it’s trying to solve
The rationale (at least in public statements) centers around national security and data control, while preserving TikTok in the U.S.:
- Concern: that ByteDance (a Chinese company) can access U.S. user data, manipulate algorithmic content (propaganda, influence operations), or otherwise use TikTok as a foreign leverage tool.
- Solution: shift control of sensitive parts (algorithm, user data) to U.S.-based investors and infrastructure.
- By limiting ByteDance’s ownership (< 20%) and removing it from security control, the deal aims to comply with a bipartisan 2024 U.S. law that mandates a divestment or ban of TikTok.
- Maintaining TikTok avoids a complete ban—which would cause disruption for millions of U.S. users and businesses (many small businesses use TikTok for ads and outreach, as noted in the transcript).
Risks, open questions & challenges
This is a highly complex deal with many unresolved technical, legal, and geopolitical issues. Some of the key uncertainties:
| Issue | Why it’s tricky / what’s unclear |
|---|---|
| Algorithmic “control” | Even if a U.S. copy or version of the algorithm is licensed and “retrained,” the original algorithm architecture, models, and proprietary optimization mechanisms could still originate with ByteDance. It’s unclear how wholly independent the algorithmic version for U.S. users will be. Washington Post notes: “algorithm will still be leased … but adapted” (The Washington Post) |
| Severance of influence | True severance means ByteDance/China should have zero access to decision-making on content recommendation, censorship, or backend logging—these are all tough to fully isolate in practice. |
| Chinese approval / compliance | Even if Trump says “go ahead,” China’s regulators may resist or impose conditions. There may be restrictions in Chinese law about letting a domestic company give up algorithm/control for foreign entities. |
| Valuation & funding | $14B is being reported, but that depends on how much debt is assumed, investor expectations, monetization forecasts, etc. If TikTok U.S. operations face drag or regulatory friction, valuation could be volatile. |
| Regulatory / antitrust scrutiny | Such a high-profile transaction will invite scrutiny from U.S. regulators (FTC, DOJ, FCC) about market power, data privacy, competition, etc. Also China might demand strategic concessions. |
| Board & governance conflicts | Who exactly will have veto power over key changes? Will ByteDance’s single board seat be symbolic only? How will disputes between minority and majority owners be resolved? |
| User experience disruption | Migrating U.S. users to a “new app” or version, data transfer, downtime, re-onboarding, or compatibility issues could disrupt how people use TikTok. FT said users might have to shift to a new app. (Reuters) |
| Legal / contractual constraints with existing contracts | TikTok has contracts with content creators, advertisers, platform partners, data providers, cloud services, etc. Whether those contracts allow assignment, modification, or require renegotiation is a big deal. |
| Public / political backlash | Some will view this as a political deal (e.g. Trump picks investors), or worry about censorship or content manipulation. Also, surveillance / privacy skeptics may challenge claims of “safe U.S. control.” |
| Residual Chinese stake | Even a < 20 % retention by ByteDance could raise red flags about continuing influence or incentives. |
| Implementation risk | The 120-day timeline is aggressive for all the technical, legal, regulatory, and diplomatic steps required. Delays will be expected, and some parties may balk. |
Interpretation & strategic implications
Given what we know and what’s still uncertain, here’s what the deal signals / could imply:
- This is a compromise solution: it preserves TikTok operation in the U.S., at least temporarily, while trying to undercut the strongest national security arguments against it.
- It shifts much of the perceived “security risk” into U.S. investor hands—especially Oracle, which is being portrayed as a neutral “guardian” of user data and algorithm oversight.
- It gives Trump / administration a political win: avoiding an outright ban while claiming to protect U.S. interests.
- U.S. investors are winning strategic positioning: owning a piece of a dominant social media platform with high growth and advertising leverage.
- It sets a precedent: international tech platforms may face forced structural separations or forced local “firewalls” to satisfy national security concerns.
- But there’s a credibility test: enforcing true independence, algorithmic transparency, resisting political influence, and maintaining user trust will all be major ongoing tests.
Here’s a scenario model for the TikTok U.S. deal, looking 1–3 years ahead. I’ll frame it in Best Case, Middle Case, and Worst Case outcomes, covering valuation, revenue, regulation, and politics.
📈 Best Case (optimistic scenario)
- Valuation & investors: The $14B valuation proves conservative. Ad revenue in the U.S. continues to grow >20% annually, pushing the TikTok U.S. entity toward $25–30B valuation by 2027.
- Revenue: U.S. operations bring in ~$11B in 2024 → ~$15–18B by 2026. Oracle + partners profit from both ad growth and secure data hosting contracts.
- Security credibility: Oracle manages data storage and algorithm oversight smoothly, with no major breaches or controversies. Political critics grudgingly accept the setup.
- User trust: Users see no difference in experience. Small businesses thrive on cheap, effective advertising. TikTok Shop expands in the U.S., capturing e-commerce revenues.
- Politics: Trump and allies claim victory; Democrats do not reverse the deal if they regain power. A bipartisan consensus emerges that this “firewalled U.S. TikTok” is safe.
- ByteDance’s role: ByteDance’s minority stake (<20%) is passive, with no signs of interference. China refrains from retaliation.
⚖️ Middle Case (most likely / mixed)
- Valuation & investors: Valuation hovers around $14–16B. Growth slows as some advertisers hesitate due to ongoing scrutiny.
- Revenue: U.S. operations grow to ~$13–15B revenue by 2026, but growth is below expectations.
- Security credibility: Questions persist about whether algorithm code is “fully U.S. controlled” or still leased from ByteDance. Washington Post already noted the algorithm may still be “licensed” rather than fully owned. 【web†source】
- User trust: Younger users continue using TikTok, but older demographics distrust it more. TikTok retains cultural dominance but faces competition from YouTube Shorts and Instagram Reels.
- Politics: The deal becomes a campaign issue in 2026 or 2028 elections. Some argue it’s still “China-linked.” If political winds shift, further restrictions could be imposed.
- ByteDance’s role: ByteDance remains a quiet minority shareholder but occasionally sparks controversy if Chinese influence is alleged.
🚨 Worst Case (pessimistic scenario)
- Valuation & investors: Valuation collapses below $10B if U.S. regulators, courts, or China block parts of the deal. Investors lose money.
- Revenue: Ad revenue shrinks as advertisers flee due to controversy or new regulation. User base declines if U.S. consumers perceive censorship, bias, or instability.
- Security credibility: Investigations reveal ByteDance or Chinese staff still influence algorithm/data. Political backlash follows.
- User trust: U.S. teens stick around, but parents, regulators, and schools push for bans. Businesses diversify away. TikTok loses its edge to Reels/Shorts.
- Politics: Congress (or a new administration) forces a full ban or complete divestiture. Trump’s “deal” becomes a political liability.
- ByteDance’s role: China retaliates, blocking U.S. companies in China or tightening tech transfers. The U.S.–China relationship worsens.
🧭 Key variables to watch
- Regulatory compliance — Does the 120-day deadline get met without major court challenges?
- Algorithm independence — Is the algorithm truly U.S.-controlled or just “licensed”?
- ByteDance minority stake — Will China accept ByteDance’s passive role, or try to exert leverage?
- Political climate — Does this deal get bipartisan cover, or does it become a wedge issue in 2026/2028?
- Ad market competition — TikTok’s edge in ad targeting vs YouTube Shorts, Instagram Reels, Snap.
- E-commerce success — If TikTok Shop grows in the U.S., it could double revenue streams.
✅ Bottom line:
- In the best case, TikTok U.S. becomes a thriving $25–30B company with Oracle and partners cashing in.
- In the middle case, it’s stable but politically contested, with moderate growth.
- In the worst case, the deal collapses under political or regulatory pressure, leaving investors and users burned.
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