Parent company Bytedance will retain only a 20% share
Life
The United States and China have announced a provisional agreement to bring social network TikTok under US control. With this, a nationwide ban, long threatened, appears to be off the table for now.
The announcement followed talks in Madrid attended by President Trump and Treasury Secretary Scott Bessent. The agreement should be officially confirmed in a phone call between Trump and Chinese President Xi Jinping in the next few days.
Bessent and his colleague Jamieson Greer initially stressed that China was making aggressive demands. Negotiators reportedly wanted to tie the deal to broader concessions, including lowering tariffs and easing technology restrictions, that the US said were unrelated to TikTok itself. An earlier attempt to spin off the US parts of TikTok to a US company failed because China did not give approval in response to US trade tariffs.
A previous attempt to spin off the US parts of TikTok to a US company failed because China did not give approval in response to US trade tariffs.
According to the plan, ByteDance, TikTok’s Chinese parent company, may only retain a minority stake of up to 20%. The rest would be acquired by US investors and companies, including Oracle, Blackstone and Andreessen Horowitz. In doing so, the United States wants to address national security concerns, while at the same time ensuring that China retains some ‘Chinese features’ of the app, for example through licensing of algorithms, as long as they do not undermine US control.
The deal comes within the scope of the US government’s efforts to regulate the use of the app.
The deal fits within legislation passed in Washington last year. That required ByteDance to sell TikTok or risk banning the app altogether. Trump pushed back the deadline several times, but made it clear that a structural solution was now needed. Critics still fear the tie-up with ByteDance is a risk, as the app could theoretically be used to spread Chinese propaganda.
For users, the agreement means that for now, TikTok will remain available as usual in the United States, where the app reaches some 170 million people and generated more than $10 billion in revenue last year. Large US tech companies, such as Oracle that already manages TikTok’s US data, are likely to play a role in the new ownership structure. This averts the danger of a ban for now, but the details of the deal will determine how much influence China retains.
Business AM