Key Points:
- Trump gave TikTok 120 days to separate from ByteDance.
- U.S. investors will control TikTok Deal; data and algorithms move to U.S. oversight.
- Concerns remain over algorithm control and Chinese approval.
President Donald Trump has signed an executive order approving a deal that sets the stage for TikTok’s U.S. operations to be separated from its Chinese parent, ByteDance. The order, issued on September 25, grants a 120-day extension to finalise the divestiture plan required under a law mandating foreign-controlled apps either restructure or face a ban in the United States.
The proposed structure values the new TikTok Deal U.S. entity at about $14 billion. Under the arrangement, American and allied investors are expected to control the majority share, while ByteDance and Chinese investors will retain less than 20 per cent. The order specifies that data storage, algorithm oversight, and content moderation must be moved fully under U.S. control.
Trump emphasised that the deal would preserve TikTok Deal for its more than 170 million American users while addressing longstanding national security concerns. He also noted that discussions with Chinese leadership had eased tensions around the transaction, though formal regulatory approval from Beijing remains uncertain.
Unresolved Questions Over Algorithm and Ownership
Despite the executive order, significant questions remain over how the restructured company will operate. At the heart of the uncertainty is TikTok Deal algorithm — the recommendation system that drives user engagement and has long been viewed as the platform’s most sensitive asset. While the order calls for the algorithm to be retrained and monitored under U.S. security partners, it is still unclear how this separation from ByteDance technology will be implemented.
Ownership stakes are also under debate. Early indications suggest U.S. firms such as Oracle and Silver Lake, along with Abu Dhabi-based MGX, could hold around 45 to 50 per cent of the new entity. ByteDance investors are expected to maintain about 30 per cent, while ByteDance itself would be limited to a minority stake to ensure compliance with U.S. law.
The restructured board is expected to feature seven members, with six chosen from U.S. national security backgrounds and one selected with ByteDance’s approval. Lawmakers have stressed that these measures must guarantee a “clean break” from Chinese influence, particularly concerning data access and decision-making authority.
Political and Legal Stakes Ahead
The executive order is rooted in legislation passed in 2024, which requires foreign-adversary–controlled applications to divest or be banned from the U.S. The law was upheld by the Supreme Court earlier this year, cementing the government’s authority to enforce such measures.
Supporters of the deal argue it strikes a balance between protecting national security and preserving access to a popular platform used by millions of Americans. They view the arrangement as a way to safeguard sensitive data while avoiding an outright ban that could have disrupted users, creators, and businesses.
Critics, however, caution that loopholes could allow ByteDance to maintain indirect influence, especially if algorithmic oversight is not fully severed. They also point out that Chinese regulatory approval remains a potential obstacle that could complicate or delay the transaction.
With 120 days to finalise the deal, the coming months will be critical in determining whether TikTok’s U.S. operations can be truly insulated from foreign control. Lawmakers, regulators, and investors are expected to scrutinise every detail as the social media giant navigates one of the most closely watched tech restructurings in recent history.
Visit The Enterprise World for the most recent information.
