TikTok Deal Averts U.S. Ban but Leaves Security Doubts Unaddressed

Source: [1] Trump approves TikTok deal through executive order at $14 billion (https://www.cnbc.com/2025/09/25/trump-approves-tiktok-deal-through-executive-order.html?msockid=217137a178f06f731f6721d279626e56)

[2] Trump signs order paving way for TikTok deal to avoid U.S. ban (https://www.cbsnews.com/news/trump-tiktok-deal-oracle-bytedance/)

[3] Trump signs executive order approving TikTok deal - TechCrunch (https://techcrunch.com/2025/09/25/trump-signs-executive-order-approving-tiktok-deal/)

[4] Trump will sign an executive order Thursday that clears the path … (https://edition.cnn.com/2025/09/25/tech/tiktok-executive-order-trump)

[5] Donald Trump signs order to help keep TikTok operating in US (https://www.usatoday.com/story/news/politics/2025/09/25/donald-trump-tiktok-china-sale-united-states/86353645007/)

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President Donald Trump on September 25 signed an executive order finalizing a $14 billion deal to transfer TikTok’s U.S. operations to a joint venture led by American investors, marking a pivotal step in resolving a years-long national security dispute with TikTok’s Chinese parent company, ByteDance. The agreement, which requires Chinese government approval, establishes a new entity to oversee TikTok’s U.S. business while limiting ByteDance’s stake to less than 20%. Enterprise firms Oracle, Silver Lake, and the Abu Dhabi-based MGX investment fund will collectively hold approximately 45% of the new entity, with ByteDance investors and other stakeholders owning 35%.

The deal aligns with a bipartisan national security law mandating the divestiture of foreign-owned apps deemed risks to U.S. data security. Trump’s order classifies the transaction as a “qualified divestiture,” effectively pausing enforcement of the law for 120 days to allow regulatory approvals. Oracle will manage TikTok’s U.S. data security and algorithmic operations, a role emphasized by Trump during the signing ceremony. “It’s owned by Americans, and very sophisticated Americans,” Trump stated, highlighting Oracle CEO Larry Ellison’s involvement and the firm’s “top to bottom security” oversight.

Critically, the federal government will not hold an equity stake or “golden share” in the new entity, according to reports. The structure also includes provisions to ensure TikTok’s U.S. user data is stored and processed domestically, addressing longstanding concerns about potential Chinese access to sensitive information. However, the deal has drawn scrutiny from some lawmakers, including Republican Rep. John Moolenaar, who raised doubts about ongoing ties between the new entity and ByteDance’s algorithmic systems. The law explicitly prohibits operational collaboration between the new owners and ByteDance, but the administration maintains the arrangement complies with legal standards.

Trump’s executive order also extended the deadline for ByteDance to complete the divestiture until December 16, following previous extensions during his second term. The president cited direct approval from Chinese President Xi Jinping, who reportedly greenlit the deal during a recent call. “I told him what we were doing, and he said, ‘Go ahead with it,’” Trump said, signaling cross-border cooperation. The deal’s valuation of $14 billion, as noted by Vice President JD Vance, reflects a compromise between preserving TikTok’s market presence and mitigating national security risks.

Analysts estimate TikTok’s U.S. operations could be valued between $30 billion and $35 billion based on its user base and algorithmic capabilities, though the final price remains undisclosed. The joint venture’s board will be majority American-owned, with Oracle, Silver Lake, and other investors assuming control of strategic decisions. Trump and Vance emphasized the deal would “secure American data” while maintaining TikTok’s global content accessibility for U.S. users.

The transaction faces regulatory hurdles, including final approvals from both U.S. and Chinese authorities. While the administration touts the arrangement as a “win for Americans,” critics argue the algorithm’s continued reliance on ByteDance’s original model could leave vulnerabilities. Trump dismissed concerns about political bias in content moderation, asserting, “Every group, every philosophy will be treated fairly”. The deal’s completion is expected to pave the way for a first in-person meeting between Trump and Xi at the APEC Summit in South Korea, underscoring the transaction’s geopolitical significance.

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