TikTok's U.S. business would be controlled by an investor consortium including Oracle, Silver Lake and Andreessen Horowitz under a framework the U.S. and China are finalizing as talks shift into high gear, according to people familiar with the matter.
The arrangement, discussed by U.S. and Chinese negotiators in Madrid this week, would create a new U.S. entity to operate the app, with U.S. investors holding a roughly 80% stake and Chinese shareholders owning the rest, the people said.
This new company would also have an American-dominated board with one member designated by the U.S. government.
The TikTok negotiations are one part of the complex economic and trade negotiations between Washington and Beijing, along with other thorny questions like the fate of chip maker Nvidia's exports to China. Politicians in both U.S. parties have expressed national security concerns about TikTok, whose massive user base includes many young Americans.
Existing users in the U.S. would be asked to shift to a new app, which TikTok has built and is testing, people familiar with the matter said. TikTok engineers will re-create a set of content-recommendation algorithms for the app, using technology licensed from TikTok's parent ByteDance, the people said. U.S. software giant Oracle, a longtime TikTok partner, would handle user data at its facilities in Texas, they said. Silver Lake, a private-equity firm, and venture-capital firm Andreessen Horowitz are both longtime tech investors.
Both sides are still working out the final details of the proposed deal and terms could change. In a new executive order Tuesday, President Trump pushed back the TikTok ban until Dec. 16, the latest of several delays .
Negotiations over TikTok come as both Washington and Beijing lay the groundwork for a potential meeting between Trump and Chinese leader Xi Jinping later this year, with Beijing pushing for a Trump visit to China.
TikTok headquarters in Los Angeles.
For the TikTok plan to comply with U.S. law, tech industry executives argue, its algorithms must be created and maintained by an American engineering team insulated from Chinese influence. Beyond the financial terms, deciding how to handle TikTok's algorithm has been a tricky part of the deal because it is seen as arguably the most lucrative part of the company.
"We've got a deal on TikTok. I've reached a deal with China. I'm going to speak to President Xi [Jinping] on Friday to confirm everything," Trump said outside the White House Tuesday morning before leaving for a trip to the U.K. "These are very big companies that want to buy it."
The framework of the agreement came together during the Madrid trade talks in recent days. The contours of the deal have been under consideration since this spring. The two sides began discussions in January, when Trump said he would keep TikTok from going dark under a 2024 law by executing a deal to save it in the U.S.
Existing ByteDance investors, including Susquehanna International, KKR and General Atlantic, would be part of the group owning roughly 80% of the new company. The stake of ByteDance's Chinese shareholders would dip just under 20% to comply with a U.S. law passed last year requiring the firm to do a deal or stop operating in America.
"Both sides have reached a basic consensus on resolving the TikTok issue, " Wang Jingtao, deputy director of China's top cyberspace regulator, told reporters in Madrid.
A senior White House official said, "Any details of the TikTok framework are pure speculation unless they are announced by this administration."
President Trump addressing reporters outside the White House.
Beijing had expressed concern about a U.S.-controlled entity using technology that TikTok's parent developed in China, in particular the algorithm that decides which videos to recommend.
But Wang said China was now open to "licensing the use of TikTok's algorithm and other intellectual property rights." He also said both sides have agreed on "entrusting the operations of U.S. user data and content security business."
The details will receive scrutiny from officials in both countries who are still worried about the national-security implications. Concerns about Chinese control of an app used by some 170 million Americans led Congress to pass the law that President Joe Biden signed last year.
The deal could end a yearslong saga over TikTok's U.S. operations. Trump tried to ban it in his first term, but changed his stance when he wielded the video-sharing app to reach young voters during last year's election. TikTok CEO Shou Chew attended the inauguration in January. Trump swooped in to save the app as one of the first moves of his second term.
"The kids wanted it so badly. I had parents calling me up...They say if I don't get it done, they're in big trouble with their kids," Trump said Tuesday. "I think it's great. I hate to see value like that thrown out the window."
ByteDance's revenue rose around 25% to $91 billion in the first half of this year, with around a quarter from businesses outside China, according to investors of the company.
With the prospects of a deal in the U.S., the internal valuation of ByteDance hit a record high of around $330 billion in August, according to a share buyback tender seen by The Wall Street Journal. ByteDance's shares aren't listed on a stock exchange, but it has been regularly buying shares owned by employees and investors.
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