Background on Key Figures and Relevance
Former U.S. President Donald Trump signed an executive order on Thursday proposing a deal for a U.S.-based version of TikTok, reducing China’s stake to “less than 20%” and placing control in the hands of Trump allies.
Among these investors are Larry Ellison, founder of tech giant Oracle; Michael Dell, technology investor; Rupert Murdoch, media mogul; investment firm Silver Lake Partners; and influential Silicon Valley company Andreessen Horowitz. All are Trump supporters, though the President insisted that the app would not follow any political line.
Details of the Proposed U.S. TikTok Version
Trump announced from the Oval Office that this U.S. version of TikTok would be run by “very sophisticated” investors.
The proposed U.S. TikTok will reportedly have a copy of the app’s algorithm, often described as its “secret sauce,” which has helped make TikTok one of the world’s most popular platforms in just a few years.
A White House official stated that the algorithm will be “continuously” monitored to ensure it’s not being improperly influenced.
This new TikTok structure comes in response to a law passed during Joe Biden’s administration (2021-2025) that required TikTok’s Chinese owner, ByteDance, to sell its U.S. operations or face a ban in its primary market.
Various U.S. political sectors, including Trump during his first term (2017-2021), have warned that China could use TikTok to extract data from Americans or exert influence through its advanced algorithm.
Valuation and Chinese Approval
Vice President JD Vance estimated that the U.S. entity would be worth approximately $14 billion, though he later noted that the investors would ultimately decide its price.
When asked if Chinese authorities had approved the agreement, Trump mentioned that President Xi Jinping gave the green light during a phone call last week.
“I have great respect for President Xi and appreciate his approval of the agreement,” Trump said.
Beijing, however, has remained silent on this agreement.
Key Questions and Answers
- Who are the investors backing the new U.S. TikTok version? The investors include Larry Ellison (Oracle), Michael Dell, Rupert Murdoch, Silver Lake Partners, and Andreessen Horowitz – all Trump supporters.
- What changes will the new U.S. TikTok version bring? The new version will have a copy of TikTok’s algorithm, which has been crucial to its success. The investors will ensure the algorithm isn’t improperly influenced.
- Why was this new version proposed? The proposal stems from a law passed during Joe Biden’s administration, requiring ByteDance to sell its U.S. operations or face a ban due to concerns about data extraction and influence by China.
- What is the estimated value of the new U.S. TikTok entity? Vice President JD Vance estimated it to be around $14 billion, subject to investor determination.
- Has China approved the agreement? Trump mentioned that President Xi Jinping approved it during a phone call, but Beijing has not publicly commented on the agreement.
