US President Donald Trump signed an executive order on Thursday to make it easier for a group of investors to take over TikTok and run a US-based version of the app, separate from its Chinese parent company, ByteDance.
The Trump administration has been looking for months to bring in American or other non-Chinese investors to keep TikTok operating in the country.
What is the value of the US TikTok company?
Vice President JD Vance said the new US TikTok company would be worth about $14 billion. It is worth noting here that under this deal, the Chinese ownership would drop to 20%, and control of the platform would shift to investors connected to Trump.
Vance admitted that the final price would be set by the investors, but noted that the current figure is far lower than what many analysts had predicted for the popular short-video app.
Did Trump manage a heavy discount TikTok deal? Here’s what it’s true value is
ByteDance was reportedly valued at $330 billion last month, according to a CNBC report.
The deal values TikTok’s US business at about $14 billion, which is much lower than the earlier estimates of $30 to $35 billion. This big gap has led to debate, with many analysts saying that Trump may be getting TikTok at a bargain price since the app’s real value is likely much higher.
According to CNBC, the deal does not include the US government taking any ownership or special controlling share in TikTok’s American business.
Understanding the new ownership structure
As part of the planned deal, Oracle will handle the app’s security operations and continue to provide cloud computing services for the new US TikTok company, according to people familiar with the agreement, reported CNBC. Trump highlighted Oracle CEO Larry Ellison’s role in the ownership group and said the company would play a major part in the venture.
He also added that the platform will be owned and operated by American investors. Major ByteDance backers such as General Atlantic, Susquehanna, and Sequoia are also expected to invest in the new US. TikTok entity, sources told CNBC.
Has China given approval for the TikTok US deal?
Trump said that Chinese President Xi Jinping gave his approval for the deal during a phone call last week. He noted that support from China was important to move the agreement forward.
After the call, Chinese state broadcaster CCTV reported that Xi showed support for market-based negotiations carried out under Chinese law. TikTok itself has not commented on the deal, and Chinese officials have mostly stayed quiet.
What’s next?
The executive order is a big step toward building a US version of TikTok. This move is meant to ease national security worries while keeping the app popular worldwide. The deal will now go through investment and regulatory processes, with investors such as Larry Ellison, Michael Dell, and James Murdoch are expected to play key roles in shaping TikTok’s future.
