TikTok Deal in the Works: Trump and Xi Negotiate Terms with US Investors
A proposal to save TikTok from a ban in the United States involves investments from several US-based venture capital firms, private equity funds, and tech companies. These investors would form a new US-based company to operate the app domestically. The framework largely mirrors a deal presented to President Donald Trump in April.
Key Players and Ownership Structure
The investor group, expected to own approximately 80% of TikTok, with Chinese shareholders holding the remaining stake, includes Oracle, Andreessen Horowitz, and Silver Lake. A majority-US board, including a member appointed by the Trump administration, would operate the new consortium.
Larry Ellison, executive chairman of Oracle, has been rumored to be involved in discussions to buy TikTok’s US assets. Oracle already hosts TikTok’s US data, and previously attempted to buy TikTok in 2020 before the deal was blocked.
Negotiation Details and Timeline
The agreement framework was discussed in Madrid this week. Sources caution that the framework could change before Trump and Chinese leader Xi Jinping are expected to speak by phone on Friday to potentially finalize the deal. A senior White House official stated that any details not announced by the administration are "pure speculation."
Trump's Actions and Motivations
Trump signed an executive order extending the enforcement of a TikTok ban in the United States by three months. This action could be superseded if the agreement to sell TikTok’s US assets is finalized. The administration announced that a deal has been reached between the United States and China to keep TikTok operational in the United States long-term.
Bessent's Perspective on Negotiations
US Treasury Secretary Scott Bessent stated that China relented following Trump's threat to shut down TikTok in the United States. According to Bessent, the bulk of the deal was completed by April, before Trump's tariffs caused a standstill. After tariffs were lowered, both Trump and Xi expressed interest in re-engaging on TikTok discussions. Bessent highlighted that national security concerns were addressed throughout the negotiations and praised Trump's leadership.
Potential Implications and Future Steps
A TikTok agreement is seen as a crucial step toward arranging a meeting between Xi and Trump, possibly as soon as next month. The deal's terms and investors are expected to be revealed in the coming days or weeks. The resolution aims to address both US national security concerns and allow TikTok to continue operating under American ownership.
