Introduction
President Donald Trump signed an executive order on Thursday approving the deal to keep TikTok operational in the United States, preventing the ban of the popular social media platform. The agreement, valued at $14 billion according to Vice President JD Vance, represents a crucial turning point for millions of American users and the global tech industry.
TikTok Deal Details
The deal satisfies the requirements of the national security law that required ByteDance to sell TikTok's U.S. operations or face an effective ban in the country. Under the established terms, a new joint-venture company will oversee TikTok's U.S. business, with ByteDance retaining less than 20% of the stock.
Oracle, Silver Lake, and the Abu Dhabi-based MGX investment fund will be the main investors in TikTok's U.S. business, controlling roughly a 45% stake in the entity. ByteDance investors and new holders will own the remaining 35%.
Oracle's Role and Investor Structure
Oracle will oversee the app's security operations and continue providing cloud computing services for the new TikTok U.S. firm. President Trump confirmed the involvement of Oracle CEO Larry Ellison in the ownership group, emphasizing that his company is "playing a very big part."
ByteDance investors like General Atlantic, Susquehanna, and Sequoia are expected to contribute equity in the new TikTok U.S. entity. ByteDance was reportedly valued at $330 billion last month, while analysts have previously estimated TikTok's U.S. operations could be worth between $30 billion to $35 billion.
Geopolitical Implications
Trump stated that Chinese President Xi Jinping gave the deal the go-ahead, while Vance revealed that the Chinese government put up some resistance before the agreement. However, no representatives from ByteDance were present at the signing, and the company hasn't acknowledged that a transaction is taking place.
No purchase price was mentioned, and there's no indication that the Chinese government has made changes to laws that would be necessary for a deal to take place.
Timeline and Future Developments
Trump's order prevents the Department of Justice from enforcing the national security law until December 16. That law would penalize app store operators like Apple and Google and internet service providers for providing services to TikTok's U.S. operations.
Trump had previously extended ByteDance's deadline to divest TikTok's U.S. operations through another executive order last week.
Conclusion
The agreement represents an innovative solution that balances national security concerns with the need to keep operational one of the most used social platforms in the United States. With American control of operations and Oracle as security supervisor, TikTok will be able to continue serving its millions of U.S. users under a new ownership structure.
FAQ
What exactly does the TikTok deal approved by Trump include?
The deal creates a joint venture where Oracle, Silver Lake, and MGX control 45% of TikTok's U.S. operations, while ByteDance maintains less than 20% of shares.
How much is the TikTok deal worth in the United States?
Vice President JD Vance stated that the transaction values the business at $14 billion, though no specific purchase price was provided.
What is Oracle's role in the TikTok deal?
Oracle will oversee the app's security operations and continue providing cloud computing services for the new TikTok U.S. entity.
Has the Chinese government approved the TikTok deal?
Trump claimed that Xi Jinping gave the go-ahead, but there are no official confirmations and China must still formally approve the terms.
When will the new TikTok deal take effect?
The executive order prevents enforcement of the ban until December 16, but full implementation timing depends on Chinese approval.
Who are the other investors involved in the TikTok deal?
Besides Oracle and Silver Lake, MGX (Abu Dhabi), General Atlantic, Susquehanna, Sequoia are involved, with potential participation from the Murdochs and Michael Dell.