The future of TikTok in the U.S. appears to be on more solid footing.
Presidents Donald Trump and Xi Jinping of China moved forward with a proposal that reportedly transfers oversight of the app’s U.S. operations to American investors, thereby reducing the stake held by its Chinese parent company, ByteDance.
This agreement follows several months of intense trade discussions and stands to influence not only the usage of the app by 170 million Americans, but also President Trump’s approach to balancing national security worries with diplomatic ties to Beijing.
“Significant headway was made on numerous critical matters, such as Trade, Fentanyl, resolving the conflict between Russia and Ukraine, and endorsing the TikTok Agreement,” Trump stated, without providing further details. “The conversation was highly productive, and we anticipate another phone discussion.”
Nevertheless, the President verified that he and Xi concurred to convene at the Asia-Pacific Economic Cooperation summit slated for South Korea in October, followed by reciprocal visits to their respective nations later this year.
President Xi likewise described the discussion as favorable and productive, according to , a government-controlled media outlet. Xi further commented that China “honors the company’s preferences,” yet emphasized that any accord must adhere to Chinese regulations and protect its command over TikTok’s fundamental technology. He also pressed the U.S. to ensure an “equitable, transparent, and unbiased commercial climate” for Chinese enterprises.
A framework to transfer governance of the widely used social media application to American investors had already been deliberated between the global leaders earlier this week. The application transformed into a bargaining chip throughout the protracted dispute over tariff charges between China and the U.S., culminating in a pact to implement a 90-day tariff suspension, which was subsequently prolonged in July.
Key details are outlined below.
Current Ownership Structure of TikTok
Based on the proposed terms of the agreement, TikTok’s American operations would be managed by a collective of investors comprising firms like Oracle, Andreessen Horowitz, and Silver Lake, reports . This consortium would collectively hold an 80% interest in the app, with Chinese investors maintaining a 20% share, to ensure adherence to U.S. legislation.
A number of investors who contributed to Trump’s 2024 presidential campaign are anticipated to profit from this arrangement. Among them are billionaire Jeff Yass, co-founder of Susquehanna International, an existing ByteDance supporter slated to maintain a substantial stake, and William Ford, CEO of General Atlantic and a director on ByteDance’s board.
Will TikTok’s Functionality Remain Unchanged?
The question of whether the app’s algorithm—which is fundamental to its popularity but also a major source of national security anxieties—will stay under ByteDance’s management is still unresolved.
On Friday, the White House did not promptly address TIME’s inquiry for a statement; however, a representative had previously declared that “any particulars concerning the TikTok structure are entirely speculative until officially disclosed by this Administration.”
Wang Jingtao, the deputy director of China’s Cyberspace Administration, stated at a press briefing earlier in the week that the algorithm is projected to remain unchanged due to existing licensing arrangements. Conversely, The Wall Street Journal indicated that TikTok engineers would develop a fresh application for U.S. users, featuring an algorithm licensed from ByteDance but then “re-engineered” by American developers.
Furthermore, a ByteDance affiliate will assume responsibility for managing U.S. user data and ensuring content security, Wang further noted.
What Initiated the Proposed Ban of TikTok in the U.S.?
Scrutiny over TikTok and its potential security risks arose after ByteDance, a Chinese-owned entity, acquired , a comparable social media platform that subsequently merged with TikTok.
The application experienced a surge in popularity, with over 170 million Americans currently using it. Approximately 7.5 million U.S. enterprises, collectively employing around 28 million individuals, depend on this platform, it has been reported.
However, numerous political figures, including Trump during his initial term, had previously advocated for banning the app, citing apprehensions regarding the prospective data gathering of U.S. citizens. The Department of Justice (DOJ) previously asserted that the Chinese corporation presented a “national-security risk of considerable magnitude.” Specifically, China could potentially intimidate, enlist, and conduct surveillance on the United States via its data collection practices, as articulated by former DOJ Solicitor General Elizabeth Prelogar to the Supreme Court last year.
A bipartisan legislative measure in 2024 sought to prohibit TikTok’s presence in the U.S. unless 80% of its holdings were transferred to American operators. Nevertheless, the prevailing national sentiment concerning TikTok has somewhat evolved. The Trump Administration has actively worked to preserve the app’s availability in the U.S., attributing this to its perceived contribution to Trump’s presidential victory, with the President prolonging ByteDance’s divestment deadline to a U.S. owner on at least four occasions.
“TikTok possesses enormous worth,” Trump commented during his state visit to the U.K. on Thursday. “The United States controls that value because our approval is requisite.”
