On September 25, 2025, former U.S. President Donald Trump signed an executive order approving the proposed sale and restructuring of TikTok’s U.S. operations, valuing the new U.S. entity at approximately $14 billion.
This move follows a 2024 law passed by Congress (the Protecting Americans from Foreign Adversary Controlled Applications Act, or PAFACA) which mandated that ByteDance divest TikTok’s U.S. arm or face a ban.
The executive order grants a 120-day window to finalize deal terms between U.S. and Chinese authorities.
Key Terms & Players in the Deal
Ownership & Stake Structure
- U.S. investors including Oracle, Silver Lake, Michael Dell, Rupert Murdoch, and others will take majority control.
- China’s ByteDance is expected to retain a minor (< 20 %) stake in the new entity, with limited governance influence.
- A 7-member board is proposed, with 6 seats held by Americans; ByteDance would control one.
Algorithm, Data & Control
- A central condition: the recommendation algorithm must be retrained, hosted, and continuously monitored under U.S. oversight.
- ByteDance will be excluded from control over data access, algorithmic decisions, and security oversight in the U.S. version
Valuation Discrepancy & Market Reaction
- The $14 billion figure is significantly lower than earlier speculations, some of which valued TikTok’s U.S. business at $30–40 billion.
- The lower valuation has surprised investors and analysts, raising questions about how the deal was priced.
Why This Deal Matters
1. Compliance with PAFACA & Avoidance of Shutdown
The U.S. law passed in April 2024 threatened a ban on TikTok if its U.S. arm remained under foreign adversary control. This deal aims to satisfy those conditions and keep TikTok alive in the U.S. market.
2. Signals in U.S.–China Tech & Data Politics
The deal is emblematic of the intensifying struggle over control of data, algorithms, and tech sovereignty between the U.S. and China. It also sets precedent for how foreign tech apps may need to restructure to appease national security concerns.
3. Business & Platform Impacts
- The algorithm is the heart of TikTok’s user experience. The switch in governance may influence content, recommendation patterns, and monetization.
- The U.S. operations will require massive tech, legal, and compliance adjustments.
- The reputation and trust of TikTok among users may hinge on data transparency, content moderation credibility, and regulatory compliance.
4. Market & Investor Implications
The lower-than-expected valuation suggests conservative risk assumptions baked into the deal. Investors will watch closely how the business performs under new constraints.
The entry of heavyweight names like Oracle, Silver Lake, and Murdoch’s group gives weight to the deal’s legitimacy, but also surfaces concerns of influence, governance, and power consolidation.
Challenges & Open Questions
- Chinese Approval & Delays: The deal still requires regulatory clearance from Chinese authorities, which could delay or veto it.
- Full Algorithm Control vs. Licensing: Whether “control” means full ownership or just licensed access remains subject to legal and enforcement definition. Financial Times
- Political & Legislative Backlash: U.S. lawmakers may scrutinize the deal’s sufficiency in eliminating foreign influence.
- User Experience & Trust: If content moderation or algorithm shifts are perceived as biased or opaque, users may lose trust.
- Valuation Sustainability: Will the $14 billion tag hold over time, or be revised as performance, monetization, and growth unfold?
Conclusion
Donald Trump’s signing of the TikTok deal marks a dramatic turning point—transforming a contentious battleground of regulation, national security, and tech corporate power into a structured divestment with an assigned value of $14 billion.
While it avoids a U.S. ban, the deal is littered with complexity—China’s role, algorithm control, governance, investor dynamics, valuation expectations, and regulatory oversight will all define whether this restructuring succeeds or becomes yet another flashpoint in U.S.–China tech rivalry.
