Donald Trump approves proposed deal to put TikTok under US ownership. Here's what we know

President Donald Trump signed an executive order Thursday that he says will allow TikTok to continue operating in the United States in a way that meets national security concerns.

Trump's order will enable an American-led group of investors to buy the app from China's ByteDance, though the deal is not yet finalised and also requires China's approval.

Much is still unknown about the actual deal in the works, but Trump said at a White House signing ceremony Thursday that Chinese leader Xi Jinping has agreed to move forward with it.

Vice President JD Vance added that “there was some resistance on the Chinese side, but the fundamental thing that we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure that we protected Americans’ data privacy as required by law".

The Chinese embassy in Washington didn’t immediately respond to an Associated Press inquiry seeking confirmation of China’s approval.

President Joe Biden signed legislation passed by Congress last year that would ban TikTok unless ByteDance sold its US assets to an American company by early this year. Trump has repeatedly signed orders that have allowed TikTok to keep operating in the U.S. as his administration tries to reach an agreement for the sale of the company.

The executive order itself is a declaration by the president that the proposed deal meets the security concerns laid out in that law. And it gives all negotiating parties an additional 120-day reprieve in order to finalise it.

Young people especially “really wanted this to happen,” Trump said.

Any major change to the popular video platform could have a huge impact on how Americans — particularly young adults and teenagers — consume information online.

About 43 per cent of US adults under the age of 30 say they regularly get news from TikTok, higher than any other social media app including YouTube, Facebook and Instagram, according to a Pew Research Center report published Thursday.

Asked if he’d want a US-owned TikTok algorithm to suggest more content promoting his Make America Great Again movement, Trump said he’d make it “100% MAGA” if he felt he could, but he intends for “every philosophy, every policy” to be “treated right.”

Vance said the deal ensures that “American investors will actually control the algorithm” that determines the content seen on the social media app. He said more information about the deal will be revealed in the coming weeks.

Who will control the new TikTok venture?

Under the terms of the deal that have so far been revealed by the White House, the app will be spun off into a new U.S. joint venture owned by a consortium of American investors — including tech giant Oracle and investment firm Silver Lake Partners.

Though the details have yet to be finalised, the investment group’s controlling stake in the new venture would be around 80 per cent. While ByteDance is expected to have a stake in the new venture, it would be less than 20 per cent — a portion of the ownership reserved for foreign investors. The board running the new platform would be controlled by US investors. ByteDance will be represented by one person on the board, but that individual will be excluded from any security-related matters.

TikTok’s new owners include many whose business or political interests are tied to Trump, including Oracle co-founder Larry Ellison and Rupert Murdoch, raising questions about whether political influence will be exerted on the platform.

Although he stepped down as Oracle’s CEO more than a decade ago, Ellison remains heavily involved as chairman and chief technology officer. Now 81, he could be in line to become a behind-the-scenes media power player, having already helped finance Skydance’s recently completed merger with Paramount, a deal engineered by his son, David.

Trump said Dell founder Michael Dell will also be an investor in the new venture.

TikTok users could now “get the editorial policies of the people who now have control of the company,” said David Greene, civil liberties director of the Electronic Frontier Foundation. ”It won’t be 100% MAGA. The question is how it will treat criticism of him and people he likes."

What we know about the algorithm powering the platform

The recommendation algorithm that has steered millions of users into an endless stream of video shorts has been central in the security debate over TikTok. China previously maintained that the algorithm must remain under Chinese control by law. But a US regulation that Congress passed with bipartisan support said any divestment of TikTok must mean the platform cut ties with ByteDance.

American officials previously warned that the algorithm — which is a complex system of rules and calculations that platforms use to deliver content to your feed — is vulnerable to manipulation by Chinese authorities, but no evidence has ever been presented by US officials showing that China has attempted to do so.

Trump's order says that a licensed copy of ByteDance's algorithm — "retrained" solely with US data — will power the new US version of the app. The joint venture will control and monitor the code and all content-moderation decisions. Administration officials say the retraining will nullify any risk of Chinese interference and influence.

It's not clear if the US version of TikTok would be a different experience than what users in the rest of the world are used to. Any noticeable changes made to a social media platform’s service raise the risk of alienating its audience, said Jasmine Enberg, an analyst for the research firm eMarketer.

In a prime example of how a change of control can reshape a once-popular social media platform, billionaire Elon Musk triggered an almost immediate backlash after he completed his takeover of Twitter nearly three years ago.

But Musk made extremely visible changes, including changing its name to X, pulling back on its content moderation and adding exclusive features for paid subscribers. The changes that gradually occur while different data is fed into the US copy of TikTok’s algorithm could be unnoticeable to most of its audience.

“Social media is just as much about the culture as it is the technology, and how users will take to new ownership and potentially a new version of the app is still an open question,” Enberg said.

What motivated China to make this deal?

Beijing once called the demand that TikTok be spun off from its Chinese parent company an act of “robbery,” but Chinese officials changed their tune as the US-China trade war progressed.

A TikTok deal would allow China to keep the ball rolling on trade negotiations, said Sun Yun, director of the China program at the Washington-based think tank Stimson Center. “TikTok alone does not compare with the importance of amicable US-China relations”.

Dimitar Gueorguiev, associate professor of political science at Syracuse University, argues that Beijing is more interested in retaining access to U.S. technology and services, at least in the short term, so it can build up self-sufficiency in semiconductors, artificial intelligence and advanced manufacturing.

“That is the front line of technological competition,” Gueorguiev said. “TikTok, by contrast, is a maturing consumer app with diminishing strategic weight”.