On Thursday, September 25th, President Trump signed an executive order in the Oval Office of the White House, announcing his plan to sell TikTok’s U.S. operations to American and global investors, which will comply with a 2024 law. This plan aims to ensure the protection of U.S. national security while preventing TikTok from being banned in the United States.
Vice President Pence, when discussing the U.S.-China TikTok deal, stated, “This deal indeed means that Americans can use TikTok with more confidence than before because their data will be protected and TikTok will not be used as a propaganda tool against Americans.”
Pence mentioned that the estimated valuation of this new American company is around $14 billion.
In 2024, during the Biden administration, Congress passed a law requiring the divestiture of TikTok’s U.S. assets due to concerns that the data of its 170 million American users (about half of the U.S. population) could be accessed by the Chinese government for monitoring U.S. citizens or conducting influence operations.
Former President Biden signed the “Protecting Americans From Foreign Apps Control Act” (PAFACA) on April 24, 2024. The law specifies that the sale must meet certain conditions, the president must determine through an interagency process that post-transaction, the app will no longer be under control of adversarial countries or have operational ties to them, and the restrictions of the law will no longer apply post-transaction.
TikTok is operated by the Chinese company ByteDance. Any acquisition agreement related to TikTok needs approval from Congress.
Pence also stated on Thursday, “There have been some resistance from Beijing, but our fundamental goal is to allow TikTok to continue operations on one hand and to ensure that American data privacy is protected in accordance with the law on the other.”
The White House mentioned that the proposed agreement requires all data of U.S. users to be stored on American cloud computing infrastructure operated by Oracle.
According to NBC, a senior White House official revealed that once the agreement is implemented, TikTok’s U.S. business will be operated by a new joint venture company. ByteDance, TikTok’s Chinese parent company, will hold less than 20% stake in the new company.
The confirmed new investors for TikTok’s U.S. operations include Oracle and the private equity firm Silver Lake Management LLC. The final list of investors is yet to be determined.