White House & China Finalize TikTok Deal

Photo Credit: Nordskov Media

The White House’s deal with China over a U.S. TikTok entity is expected to be finalized this week. ByteDance will choose one of seven board members.

Part of the White House’s agreement with China over TikTok’s U.S. operations includes the platform’s Chinese parent ByteDance choosing one of seven board members for the new U.S. entity. Americans will hold the other six seats, according to a senior White House official over the weekend.

The latest comes after several delays and a handful of executive orders issued by President Trump. The executive orders delayed enforcement of the law passed last year, ultimately through mid-December, to buy time for a deal to go through. That law would see TikTok banned in the U.S. unless its Chinese parent company divested its U.S. assets to an American company.

This week’s progress toward a deal has resulted in firmer details via a phone call between Trump and Chinese President Xi Jinping. The two world leaders are due to meet face to face in six weeks, where Trump indicates a deal—and signatures—will be finalized.

“It hasn’t been fully negotiated, but we’ll get something,” said Trump on Friday, September 19. “The United States is getting a tremendous fee-plus—I call it a fee-plus—just for making the deal, and I don’t want to throw that out the window.”

Under the deal being discussed, TikTok’s U.S. assets would be majority-owned by a coalition of American investors, including private equity firm Silver Lake and cloud computing firm Oracle, who would own about half of the new U.S. entity. That entity would be operated in the United States by a board of directors with national security and cybersecurity credentials, officials say.

Under ByteDance, TikTok’s current shareholders include Susquehanna International Group, General Atlantic, and KKR. According to officials, ByteDance would retain less than 20% of the stock of a joint venture controlling TikTok’s U.S. operations.

Notably, a White House official said the TikTok algorithm, which is widely considered the most lucrative part of the company, “will be secured, retrained, and operated in the United States outside of ByteDance’s control.”

“TikTok’s content recommendation algorithm will be retrained from the ground up—reviewed and analyzed under U.S. supervision with U.S. data that will not be shared outside of the United States,” White House officials said.

The same official said the U.S. version of TikTok would still enable users to interact with content outside of the U.S.

“The devil will be in the details,” said U.S. Representative Frank Pallone. “We cannot allow China continued access to massive amounts of Americans’ personal data, and we cannot allow Trump to hand TikTok over to his tech bro buddies.”

Traditionally, the government has not been paid by companies for its involvement in private sector deals, nor has it normally been paid by companies for national security approvals or export licenses. But some legal experts say the U.S. government’s purported multibillion-dollar “fee” and the arrangements surrounding it could be illegal.

However, the unusual TikTok arrangement would end years of uncertainty about the short-form video app’s fate in the United States, dating back to the first Trump administration.