Trump announces agreement with Chinese leader on TikTok deal
In a significant development, TikTok, the popular social media platform owned by Bytedance, has agreed to a deal that will see American investors take over its US business. The deal, which is reportedly backed by Chinese President Xi Jinping, is set to bring several billion dollars to the US government as part of the transaction.
Bytedance, which is based on the Cayman Islands and is 60% owned by international investors, will see Chinese shareholders holding the remaining percentage in the new US subsidiary. Notably, the founders of Bytedance, including Zhang Yiming, only hold a 20% stake but maintain control through shares with more voting rights.
The investment group that will hold 80% of the shares in TikTok's new US subsidiary consists of American heavyweights such as Oracle, Silver Lake, and Andreessen Horowitz. Oracle, backed by Trump supporter Larry Ellison, will retain its role as TikTok's technical service provider in the US.
The potential ban of TikTok in the US, due to a law passed last year with a deadline of January 19, 2025, has been a looming threat for months. However, US President Donald Trump has stated that the deal is "progressing well" and "investors are getting ready."
The takeover of TikTok's US business by US investors may further increase the financial influence of right-wing political supporters around Trump in the US tech industry. This comes after the takeover of Twitter by tech billionaire Elon Musk, which has seen right-wing political voices become more prominent.
Interestingly, Facebook's parent company, Meta, including Instagram, has seen its founder, Mark Zuckerberg, move politically closer to the Republicans. This shift in tech industry politics could have significant implications for the future of social media regulation in the US.
Bytedance, headquartered in Beijing, is bound by many Chinese regulations due to its headquarters. This deal marks a significant step in the globalisation of TikTok, as it seeks to navigate the complexities of international politics and regulations.
The future of TikTok in the US is no longer in limbo, but the implications of this deal for the tech industry, politics, and social media regulation will be closely watched in the coming months.
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