Formally, the deferment of the ban on the TikTok social network in the United States is valid until next Saturday, and potential participants in the deal to separate American assets still have time to negotiate. Donald Trump did not hide the fact that he is ready to use tariffs as an argument for bargaining with the Chinese side.
The extent of the participation of the Chinese authorities or even the parent company ByteDance in the negotiations on the separation of the American business of TikTok has not yet been disclosed. However, US President Donald Trump said on board a government airliner yesterday that the issue of tariffs could theoretically be used as leverage on China’s position. “There is a situation with TikTok in which China will probably agree to approve the deal in exchange for some action on tariffs. They give us more power in negotiations. That’s always the case,” Donald Trump shared his opinion.
He also added that the US authorities are “very close to making a deal with a group of very good people,” refraining from listing the possible participants in the deal. According to Bloomberg, the deal structure currently being discussed involves a consortium of American investors, including Andreessen Horowitz, Blackstone and Oracle. Oracle’s role is reportedly limited to a modest stake in the new joint venture and the function of ensuring the security of personal data of American TikTok users.
The group of new investors could receive a 50% stake in TikTok’s American business, while existing ByteDance investors would retain 30% of the shares. The Chinese company itself would receive less than 20% of the shares, which, from the point of view of American law, would be enough to ensure its “neutrality” in terms of influencing the social network’s activities in the United States. We’ll keep you updated as more information about the deal becomes available.
Discussions Around the Algorithm
One of the ideas being discussed at the negotiating stage is for China’s ByteDance to retain nominal control over TikTok’s recommendation algorithm, but with its subsequent licensing and transfer to an American structure that will be created with the participation of American investors.
There is already a complicated situation around this algorithm, notes NIXSOLUTIONS. On the one hand, Beijing considers such technologies important for national security and well-being and is therefore not ready to transfer them outside of China without special approval from the government. On the other hand, the law adopted in the United States last year does not leave the Chinese authorities or ByteDance itself the opportunity to use this algorithm in US jurisdiction.
While all sides work to balance political, legal, and security concerns, the final shape of the deal remains uncertain. Yet we’ll keep you updated as more integrations become available or any new announcements are made in the coming days.