US President Donald Trump signed an executive order on Thursday declaring his plan to sell Chinese-owned TikTok's US operations to US and global investors will address the national security requirements in a 2024 law.
The new US company will be valued at around $14bn (R244.1bn), vice president JD Vance said, putting a price tag on the popular short video app far below some analysts estimates. Trump on Thursday delayed until January 20 enforcement of the law that bans the app unless its Chinese owners sell it amid efforts to extract TikTok's US assets from the global platform, line up American and other investors, and win approval from the Chinese government.
The publication of the executive order shows Trump is making progress on the sale of TikTok's US assets, but details need to be fleshed out, including how the US entity will use TikTok's most important asset, its recommendation algorithm.
“There was some resistance on the Chinese side, but the fundamental thing we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure we protected Americans' data privacy as required by law,” Vance told reporters at an Oval Office briefing.
Trump's order said the algorithm will be retrained and monitored by the US company's security partners, and its operation will be under the control of the new joint venture.
Trump said Chinese President Xi Jinping has indicated approval of the plans.
“I spoke with President Xi. We had a good talk, I told him what we were doing, and he said go ahead with it,” he said.
The Chinese embassy in Washington did not immediately respond to a request for comment. TikTok did not immediately comment on Trump's action.
Trump has credited TikTok, which has 170-million US users, with helping him win re-election last year. Trump has 15-million followers on his personal TikTok account. The White House launched an official TikTok account last month.
“This is going to be American-operated all the way,” Trump said.
He said Michael Dell, the founder, chairman and CEO of Dell Technologies, Rupert Murdoch, chair emeritus of Fox News owner Fox Corp, newspaper publisher News Corp and “probably four or five absolutely world-class investors” would be part of the deal.
The White House did not discuss how it came up with the $14bn valuation.
TikTok's Chinese parent, ByteDance, values itself at more than $330bn (R5.7-trillion), according to its new employee share buyback plan. TikTok contributes a small percentage of the company's total revenue.
According to Wedbush Securities analyst Dan Ives, TikTok was estimated to be worth $30bn to $40bn (R523.1bn to R698bn) without the algorithm as of April 2025.
Alan Rozenshtein, a professor at the University of Minnesota Law School, said the executive order leaves unanswered questions, including whether ByteDance will continue to control the algorithm.
“The problem is that the president has certified the deal, but has not provided a lot of information on the algorithm,” he said.
A group of three investors, including Oracle and private-equity firm Silver Lake, will take a roughly 50% stake in TikTok US, two sources familiar with the deal said on Thursday.
A group of existing shareholders in ByteDance will hold about a 30% stake, one of the sources said. Among ByteDance’s investors are Susquehanna International Group, General Atlantic and KKR.
Given intense investor interest in TikTok, the 50% stake may shift, the source noted.
Oracle and Silver Lake did not immediately respond to requests for comment.
CNBC reported earlier, citing sources, that Abu Dhabi-based MGX, Oracle and Silver Lake are poised to be the main investors in TikTok US with a combined 45% ownership.
MGX did not immediately respond to a Reuters request for comment on the CNBC report.
Republican House of Representatives legislators said they want to see more details of the deal to ensure it represents a clean break with China.
“As the details are finalised, we must ensure the deal protects American users from the influence and surveillance of CCP-aligned groups,” said Republican US representatives Brett Guthrie, Gus Bilirakis and Richard Hudson.
The agreement on TikTok’s US operations includes the appointment by ByteDance of one of seven board members for the new entity, with Americans holding the other six seats, a senior White House official said on Saturday.
ByteDance would hold less than 20% in TikTok US to comply with requirements set out in the 2024 law that ordered it shut down by January 2025 if its US assets were not sold by ByteDance.
Reuters
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