Trump Unveils $14 Billion TikTok Deal, Questions Linger

President Donald Trump announced a proposed deal aimed at keeping TikTok operational in the United States, involving a group of investors who would purchase the app from its Chinese parent company, ByteDance. This announcement raises numerous questions about the deal’s viability and its implications for American users.

The potential sale hinges on ByteDance agreeing to divest TikTok’s U.S. operations, a process that requires approval from the Chinese government. Currently, Beijing appears reluctant to allow a significant national asset to exit the market, especially amid ongoing trade tensions. Despite Trump’s assertions that an agreement has been reached, there has been no confirmation from Chinese officials. Queries directed at TikTok and ByteDance have reportedly gone unanswered.

Details of the Proposed Agreement

In an executive order signed on October 5, 2023, the Trump administration outlined a deal involving key investors closely associated with the president, notably Larry Ellison, CEO of Oracle and a prominent figure in Silicon Valley. Ellison, considered one of the few high-profile Republican voices in the technology sector, is a long-time ally of Trump. His involvement in the deal could signal a shift in TikTok’s management philosophy, even though Trump has denied any intent to create a conservative rebranding of the platform.

The investor group also includes media mogul Rupert Murdoch and his son Lachlan Murdoch, who oversee Fox News. The participation of these figures raises speculation about the potential direction of TikTok, a platform Trump has credited with enhancing his outreach to younger voters.

Concerns about media diversity arise amidst fears that increased government intervention could lead to a concentration of conservative viewpoints across social media platforms. The evolving landscape, marked by Elon Musk’s transformation of X (formerly Twitter) into a platform for far-right politics, adds further complexity to the situation.

Financial Implications and Legislative Oversight

During the announcement event, JD Vance, Vice President, indicated the deal’s value at $14 billion. This valuation raises eyebrows, particularly in contrast to Twitter’s $44 billion sale price. According to reporting by Bloomberg, ByteDance may retain significant value through a licensing agreement, potentially receiving around half of the new entity’s profits despite holding only a 20% stake in the arrangement. These terms could provoke scrutiny in Washington, where lawmakers are evaluating whether the sale complies with existing divest-or-ban laws.

The executive order further extended the deadline to implement a ban on TikTok until mid-January 2024, effectively prolonging the uncertainty surrounding the app’s future in the U.S. John Moolenaar, the Republican chairman of the House Foreign Affairs Committee, has expressed intentions to thoroughly oversee the agreement, emphasizing concerns regarding ByteDance‘s previous actions.

Legal experts like Carl Tobias from the University of Richmond School of Law have criticized the clarity of the deal, questioning the assurances provided regarding U.S. national security. Given that Oracle is already managing TikTok’s data servers to address security concerns, many critics doubt whether the proposed agreement will result in substantive changes.

The fate of TikTok hangs in the balance as negotiations continue and the political landscape remains contentious. With over 2,400 employees representing a diverse array of nationalities, the potential outcomes of this deal could significantly impact how social media is governed in the United States.