President Trump gave his formal blessing on Thursday to a deal for a consortium of mostly U.S. investors to take over the short video app TikTok, signing an executive order green-lighting the spinoff and saying it has "good controls" in terms of security and safety.
TikTok is owned by Beijing-based ByteDance, but a law passed last year requires the parent company to divest or the app will be banned in the United States over national security concerns.
Trump's executive order says the deal meets the "qualified divestiture" standards required by Congress — proof that the app is no longer controlled by a foreign adversary.
The order says that under the deal, ByteDance will own less than 20 percent of the new entity, and the new venture will be run by a board of directors subject to rules that protect Americans' privacy.
"I have determined that the proposed divestiture would allow the millions of Americans who enjoy TikTok every day to continue using it while also protecting national security," the president wrote in the executive order.
At a signing event at the White House Thursday afternoon, Trump said there would be "probably four or five" investors in the new entity. He named Oracle founder Larry Ellison, Rupert Murdoch of News Corp fame, and Dell Technologies founder Michael Dell. A senior White House official said earlier this week the investment firm Silver Lake would also be involved.
Vice President J.D. Vance, who has run point for the administration on efforts to forge a deal, told reporters the company will be valued at around $14 billion, which he said he thought was a good deal for investors.
Asked how data privacy for U.S. users would be safeguarded under the new arrangement, Vance offered few details, but said: "What this deal ensures is that the American entity and the American investors will actually control the algorithm. We don't want this used as a propaganda tool by any foreign government."
TikTok says it has around 170 million users in the U.S. — about half of the population. That popularity — and its Chinese ownership — fueled concerns that the app could be used by the Chinese government to collect data on Americans or manipulate U.S. users with propaganda or disinformation.
The Protecting Americans from Foreign Adversary Controlled Applications Act, signed into law last April, declares that apps run by foreign adversaries pose "unacceptable national security risks," and the only way to eliminate those risks is to switch ownership.
The law required ByteDance to sell off TikTok, otherwise it would be banned in the U.S. The Supreme Court upheld the law, despite TikTok's free speech challenge to it. But on Inauguration Day, Trump signed the first of several executive orders pausing enforcement of the ban. Meanwhile, the Trump administration has been trying to broker a deal for control to shift into American hands.
The deal that Trump approved on Thursday highlights a turnaround for the president, who tried to shut TikTok down during his first administration. On Thursday, he said he was "a little bit prejudiced" in favor of the app, which he credits with boosting his vote tally among young people in 2024 paving the way for his return to the White House.
The fate of TikTok has been wrapped up in the broader power struggle between the United States and China, including negotiations over trade and tariffs.
Vance said there had been "some resistance on the Chinese side" to getting the deal done. But Trump said he had had "a very good talk" with Chinese leader Xi Jinping by phone last week, and that "he gave us the go-ahead."
Trump and Xi will meet in about five weeks at an Asia-Pacific leaders' summit in South Korea, and Trump has said he plans to visit China next year, with Xi making a reciprocal visit to the United States "at an appropriate time."
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