After more than a year of negotiations, the United States and China are nearing an agreement on the ownership of TikTok’s American business. U.S. Treasury Secretary Scott Bessent indicated that both sides have reached a consensus, with expectations that the Chinese side will approve the deal with progress anticipated in the coming weeks to months.
In September of this year, the White House announced a preliminary agreement between the U.S. and China to ensure TikTok’s continued operation in the United States. According to White House spokesperson Levitt, under the terms of the deal, the majority ownership of TikTok’s U.S. business will be held by American investors, with a board of directors possessing extensive national security and cybersecurity qualifications in control.
Following the Trump-Xi meeting on October 30th, Bessent mentioned in an interview with Fox Business News that China has approved the transfer agreement for TikTok, stating, “we will ultimately see a resolution.”
The following details the progress and future development of the American version of TikTok.
According to reports from Bloomberg, a new “American version of TikTok” company is set to be established. Investors expected to be involved include Oracle, private equity firm Silver Lake Management, and the investment company MGX from Abu Dhabi; ByteDance, based in Beijing, will hold a stake of no more than 20%.
President Trump signed an executive order on September 25th, stipulating that the new company must be majority-owned by Americans and have operational control. ByteDance will hold less than 20% of the shares, with the rest held by specific investors, and both sides must complete the transaction within 120 days.
White House senior officials revealed earlier that at least six out of seven board seats in the new company will be held by American citizens with national security or cybersecurity backgrounds, with ByteDance appointing only one director who cannot participate in the Security Committee.
Currently, Oracle has provided cloud services for TikTok and hosts user data in the U.S. and other countries. Senior White House officials stated that if the deal is finalized, Oracle will be responsible for providing cybersecurity services to assist the American version of TikTok in cooperation with the U.S. government to jointly monitor the security of the application.
President Trump hinted in an interview that multiple American business leaders and media moguls might participate in the acquisition, including Fox News chairman Lachlan Murdoch, his father Rupert Murdoch, Oracle chairman Larry Ellison, and Dell chairman Michael Dell.
Beijing has not publicly confirmed whether it has formally approved the transaction. The Chinese Ministry of Commerce stated only after the Trump-Xi meeting that they will “strive to properly address TikTok-related issues.”
Vice President JD Vance revealed that the valuation of TikTok’s American business is approximately $14 billion, significantly lower than ByteDance’s overseas business valued between $35 billion to $50 billion.
Although TikTok has over 170 million users in the U.S. and annual revenue exceeding $10 billion, it has not yet turned a profit. At the current valuation, its Price-to-Sales Ratio (PSR) is only about 1.4 times, much lower than tech giants like Meta and Google’s parent company Alphabet at 8 times.
PSR is a stock valuation indicator used to measure the ratio of a company’s market value to its revenue. A higher PSR indicates the market’s more optimistic expectations for the company’s revenue growth.
TikTok’s core value lies in its algorithm, a system that precisely recommends content based on users’ recent activities and interests.
White House officials pointed out that under the new agreement, the American version of TikTok will lease a copy of the algorithm from ByteDance and be “retrained from scratch” under Oracle’s supervision. Oracle will then be responsible for the secure maintenance of the algorithm.
The official added that all U.S. user data will be stored in Oracle-managed cloud security systems with protective measures to prevent access by “foreign adversaries,” including the Chinese Communist Party.
ByteDance will also have no access to the data of American TikTok users, and will not have any control over the algorithm.
TikTok is highly popular among young demographics in the U.S., with its short video content rivaling the daily active user counts of YouTube and Instagram, and its e-commerce service TikTok Shop potentially challenging Amazon and Walmart.
For a long time, the U.S. Congress has been concerned about TikTok becoming a tool for the Chinese government to gather intelligence, as Chinese law requires companies to provide “information related to national security” upon government request.
U.S. officials are also anxious about the potential leakage of U.S. users’ personal data, fearing that the Chinese government could misuse this information for surveillance and coercion.
Furthermore, Washington worries that TikTok’s algorithm could be used to manipulate user content consumption, leading to societal divisions in the U.S. or the promotion of political narratives beneficial to Beijing.
In 2024, the Biden administration signed the “Protecting Americans from Foreign Adversary Controlled Applications Act,” requiring ByteDance to sell its U.S. business by January 2025, or face a complete ban. The Trump administration extended the deadline, with ByteDance’s final deadline now set for January 2026.
The final fate of TikTok’s American operations remains undecided. Should negotiations fail, TikTok could still face the risk of a ban.
Until the agreement is officially confirmed, TikTok will continue its current operating mode.