Trump’s TikTok deal with China – what do we know?

[NEW YORK] After more than a year of negotiations, the US and China are nearing the “resolution” of a deal to transfer the US operations of social media platform TikTok to a new investor consortium, according to US Treasury Secretary Scott Bessent.

“In Kuala Lumpur, we finalised the TikTok agreement in terms of getting Chinese approval, and I would expect that would go forward in the coming weeks and months, and we will finally see a resolution to that,” he said on Fox Business Network following US President Donald Trump’s meeting with Chinese President Xi Jinping in the capital of Malaysia.

US and Chinese officials have discussed a deal under which Oracle and several other companies would invest in a US version of TikTok. If the deal is finalised, it would resolve a persistent issue in Beijing-Washington relations and eliminate a complicating factor in broader talks over trade.

Under a national security law signed last year by then-president Joe Biden, the Protecting Americans from Foreign Adversary Controlled Applications Act, the app’s owner, Beijing-based ByteDance, was ordered to either sell TikTok US or face a ban in the country. The initial deadline was in January 2025, but Trump extended it multiple times after reentering office. The deadline is now in January 2026, one-year after the law first took effect.

Under the spinoff arrangement set out in an executive order Trump signed on Sep 25, TikTok will be majority-owned and controlled by Americans. Many of the finer details of the agreement have yet to be made public. The final outcome will help shape the fate of ByteDance, a US$400 billion startup that is China’s most valuable private company, and whose video platform TikTok is used by 170 million Americans.

How the framework evolves will likely have ramifications for the broader US social media landscape, too, where rivals including Meta Platforms and Alphabet’s Google are jostling for market share.

Who will own TikTok in the US?

Trump’s September executive order said that ByteDance will hold a less-than-20 per cent stake in TikTok US – as required by the national security law – and that the rest of the company will be owned by “certain investors,” without specifying who they could be.

The consortium of buyers is expected to include Oracle. Private equity player Silver Lake Management and Abu Dhabi-based investment company MGX are also in talks to invest in the new US venture, Bloomberg reported.

Oracle currently provides cloud services for TikTok and hosts user data in the US and other countries. Should this deal go through, Oracle will act as TikTok’s security provider and help the new US TikTok entity monitor the app for safety, working with the US government, according to a senior White House official.

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Trump suggested in an interview with Fox News that Fox chairman Lachlan Murdoch and his father Rupert Murdoch are also involved in the takeover. He mentioned Larry Ellison, the chairman of Oracle, and Michael Dell, the chairman of Dell, as well.

The proposed plan is for Americans to hold six of seven seats on the board of TikTok US, and they will have national security and cybersecurity credentials. ByteDance will choose the remaining board member, who will be excluded from the security committee, according to a senior White House official.

The executive order gave the parties 120 days to close the transaction. While Trump and other officials have said that the deal has been given the go-ahead by President Xi Jinping, the Chinese government has yet to say publicly whether it has granted its approval. After the two leaders’ much-anticipated meeting in October, China’s Commerce Ministry said only that it’s committed to properly resolving issues related to TikTok, without offering details or a full-throated endorsement of the framework the US has put forward.

TikTok will continue operating in the US in its current form until an accord is finalised.

How much will TikTok US be worth?

US Vice-President JD Vance said the deal would value TikTok US at roughly US$14 billion. That’s far below previous estimates of the worth of ByteDance’s most lucrative business outside of China, which were between US$35 billion and US$50 billion.

Valuing TikTok’s US operations has always been difficult, particularly given the complexity of the app’s coveted content algorithm. But even by the most conservative estimates, the business generates more than US$10 billion of revenue per year – though that is not enough to be profitable.

At a US$14 billion valuation, TikTok US would then carry a price-to-sales ratio of roughly 1.4 times, in line with mature, low-growth companies such as ExxonMobil and General Mills. Instagram operator Meta and Google parent Alphabet trade at about eight times sales.

What will happen to TikTok’s algorithm?

TikTok’s breakout success came off the back of its algorithm, which feeds content to users based on their recent activity and interests in order to keep them scrolling.

Under the proposed deal, the owners of the US-based TikTok will lease a copy of the algorithm from ByteDance that would be retrained “from the ground up” with Oracle’s oversight, a White House official said. Oracle will then provide security for the new US version of the algorithm, according to the official.

Data from US users will be stored in a secure cloud managed by Oracle, and there will be controls to keep out foreign adversaries, including China, the official said. ByteDance will not have access to information on TikTok’s US subscribers, nor any control over the algorithm in the US, the official said.

Why is there so much attention on TikTok’s US operations anyway?

In terms of daily active usage, TikTok US ranks among America’s most popular social media platforms, rivalling the likes of Alphabet’s YouTube and Meta’s Instagram. That level of engagement makes it a lucrative business with advertisers eager to capture the attention of its vast user base.

In 2024, TikTok drove a worldwide revenue expansion for ByteDance that helped offset an economic downturn in China, pushing sales from the parent company’s overseas operations to US$39 billion for the year, Bloomberg reported.

More importantly, as Trump himself has repeatedly emphasised, is TikTok’s influence with a younger, Gen-Z audience. The longer-term potential for newer offshoots such as TikTok Shop to challenge Amazon.com and Walmart in e-commerce is also appealing to investors.

TikTok is still arguably among the most successful overseas forays by China’s tech sector, which in past years have been circumscribed by geopolitical tensions.

Why did the US give ByteDance this ultimatum?

US lawmakers have long been concerned that TikTok could be used to spy on American citizens. This stems from the fact that China requires its companies, upon request, to share any national security-related data with its government. (TikTok says it has not been asked to provide such data to the Chinese government, and would not do so if asked.)

US officials also worry that China’s government could abuse the data of US TikTok users – for example, by collecting dossiers of personal information for blackmailing purposes. There is also fear that TikTok could use its algorithm to manipulate the type of videos users see to divide Americans or spread propaganda favourable to Chinese officials in Beijing.

TikTok sought to counter these concerns by migrating the storage of US users’ data to US-based cloud servers operated by Oracle in 2022. However, those efforts failed to assuage lawmakers and national security officials. BLOOMBERG