Trump backs US$14b TikTok deal; China urges ‘open and fair’ treatment

WASHINGTON - US President Donald Trump signed an executive order on Sept 25 declaring that his plan to sell Chinese-owned TikTok’s US operations to US and global investors will address the national security requirements in a 2024 law.

The new US company will be valued at around US$14 billion (S$18.1 billion), Vice-President J.D. Vance said, putting a price tag on the popular short video app far below some analyst estimates. 

Mr Trump on Sept 25 delayed until Jan 20 enforcement of the law that bans the app unless its Chinese owners sell it, amid efforts to extract TikTok’s US assets from the global platform, line up American and other investors, and win approval from the Chinese government.

The publication of the executive order shows Mr Trump is making progress on the sale of TikTok’s US assets, but numerous details need to be worked out, including who will own the new company’s most important asset, its recommendation algorithm.

“There was some resistance on the Chinese side, but the fundamental thing that we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure that we protected Americans’ data privacy as required by law,” Mr Vance told reporters at an Oval Office briefing.

In response to the executive order, China said on Sept 26 it hoped the US would provide “open and fair” treatment for TikTok and other Chinese companies investing in the country.

“The Chinese government respects the will of enterprises, and welcomes them to conduct business negotiations on the basis of market rules, reaching a solution that balances interests in compliance with Chinese laws and regulations,” Beijing’s Foreign Ministry spokesman Guo Jiakun told reporters.

“We hope the US will provide an open, fair and non-discriminatory business environment for Chinese companies investing in the United States.”

Mr Trump’s order says the algorithm will be retrained and monitored by the US company’s security partners, and operation of the algorithm will be under the control of the new joint venture.

Mr Trump said Chinese President Xi Jinping has indicated approval of the plans. “I spoke with President Xi,” Mr Trump said. “We had a good talk, I told him what we were doing, and he said go ahead with it.”

The Chinese embassy in Washington did not immediately respond to a request for comment. TikTok did not immediately comment on Mr Trump’s action.

Mr Trump has credited TikTok, which has 170 million US users, with helping him win re-election in 2024 and has 15 million followers on his personal account.

The White House also launched an official TikTok account in August.

“This is going to be American-operated all the way,” Mr Trump said.

He added that Mr Michael Dell, Mr Rupert Murdoch and “probably four or five absolutely world-class investors” would be part of the deal.

The White House did not discuss how it came up with the US$14 billion valuation.

TikTok’s Chinese parent, ByteDance, currently values itself at US$330 billion, according to its new employee share buyback. TikTok contributes a small percentage of the company’s total revenue.

According to Wedbush Securities analyst Dan Ives, TikTok was estimated to be worth US$30 billion to US$40 billion without the algorithm as of April 2025.

Professor Alan Rozenshtein from the University of Minnesota Law School said the executive order leaves unanswered questions, including whether ByteDance will still control the algorithm.

“The problem is that the President has certified the deal, but he has not provided a lot of information on the algorithm,” he said.

Oracle and others to own TikTok in the US

A group of three investors, including Oracle and private equity firm Silver Lake, will take a roughly 50 per cent stake in TikTok US, two sources familiar with the deal said on Sept 25.

A group of existing shareholders in ByteDance will hold a roughly 30 per cent stake, one of the sources said. Among ByteDance’s current investors are Susquehanna International Group, General Atlantic and KKR.

Given intense investor interest in TikTok, the 50 per cent stake may still shift, the source noted.

Oracle and Silver Lake did not immediately respond to a request for comment.

CNBC reported earlier that Abu Dhabi-based MGX, Oracle and Silver Lake are poised to be the main investors in TikTok US with a combined 45 per cent ownership, citing sources.

MGX did not immediately respond to a Reuters request for comment on the CNBC report.

Republican House lawmakers said they want to see more details of the deal to ensure it represents a clean break with China.

“As the details are finalised, we must ensure this deal protects American users from the influence and surveillance of CCP-aligned groups,” said US representatives Brett Guthrie, Gus Bilirakis and Richard Hudson, all Republicans, referring to the Chinese Communist Party.

The agreement on TikTok’s US operations includes ByteDance appointing one of seven board members for the new entity, with Americans holding the other six seats, a senior White House official said on Sept 20.

ByteDance would hold less than 20 per cent in TikTok US to comply with requirements set out in the 2024 law that ordered it shut down by January 2025 if its US assets were not sold by ByteDance. REUTERS, AFP