President Trump’s potential deal to avoid a TikTok ban is taking shape – with several prominent US tech and investor firms set to take majority control of the China-owned app.
Under the proposed terms, a group including billionaire Larry Ellison’s Oracle, Silver Lake and Andreessen Horowitz would form a new entity overseeing TikTok’s US operations, The Wall Journal reported, citing people familiar with the matter.
The US group will reportedly own a combined stake of approximately 80%, with Chinese investors holding the rest. Under the TikTok divestment law passed by Congress last year, Chinese ownership can’t exceed 20%.
“We’ve got a deal on TikTok. I’ve reached a deal with China. I’m going to speak to [Chinese President Xi Jinping] on Friday to confirm everything,” Trump told reporters on Tuesday. “These are very big companies that want to buy it.”
The new US-run entity would be overseen by an “American-dominated board,” according to the Journal, and include at least one person designation by the Trump administration.
Current US-based ByteDance investors, including Susquehanna, KKR and General Atlantic, will be part of the new entity that will control about 80% of TikTok, the report said.
As The Post exclusively reported, current investors like General Atlantic’s Bill Ford want to “roll” their stakes into the new US-controlled entity to avoid capital gain taxes.
But some insiders have questioned whether a move to roll Chinese shares into a US entity would violate Congress’s 20% threshold for Chinese ownership.
In an apparent effort to address critics’ concerns about China controlling TikTok’s recommendation algorithm, users will reportedly be prompted to switch to a new version of the app.
The app will use technology licensed from TikTok parent ByteDance, with all US user data handled on Oracle’s servers.
The deal terms were hammered out by US and Chinese officials in Madrid this week as part of a tense trade negotiations between the Trump administration and Beijing.
It’s still unclear if the proposed terms will pass muster with China hawks in Congress, many of whom are focused on ensuring Beijing can’t influence TikTok’s algorithm.
Michael Sobolik, a senior fellow at the Hudson Institute and China expert, said any deal to license the algorithm from ByteDance would “likely violate the law.”
President Trump issued an executive order on Tuesday delaying enforcement of the divestment law until Dec. 16, marking the latest extension of a ban that was initially set to take effect in January.
So far, the White House has sought to tamp down speculation about a potential TikTok deal.
“Any details of the TikTok framework are pure speculation unless they are announced by this administration,” a senior White House official told the Journal.
Meanwhile, People’s Daily, Beijing’s state-run propaganda outlet, said “China reached the relevant consensus with the United States on the TikTok issue because it is based on the principles of mutual respect, peaceful coexistence and win-win cooperation.”
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