By IndraStra Global Editorial Team
The recent executive order signed by President Donald Trump on September 25, 2025, marks a pivotal moment in the protracted saga of TikTok’s fate in the United States. The agreement, which transfers the popular social media platform to a consortium of U.S. investors led by Oracle, aims to address national security concerns that have long been a concern for the app, while allowing it to continue operating for its 170 to 180 million American users. The deal, valued at $14 billion, separates TikTok from its Chinese owner, ByteDance, and positions American companies to control 80% of the new U.S.-based entity, with ByteDance retaining a minority stake of less than 20%. While this arrangement appears to address longstanding fears about data privacy and foreign influence, a closer examination reveals a complex and imperfect compromise that leaves critical questions unanswered and perpetuates technological and geopolitical dependencies. This article explores the nuances of the deal, its implications for U.S.-China relations, and the broader dynamics of global tech governance, drawing exclusively on the provided news texts to maintain a balanced and rigorous analysis.
The TikTok deal emerges from a turbulent history of legal and political battles in the United States. For years, lawmakers from both parties have expressed alarm over the app’s ties to ByteDance, a Chinese tech giant, citing risks that Beijing could access sensitive user data or leverage the platform to spread propaganda. These concerns culminated in a 2024 law, upheld by the Supreme Court in January 2025, mandating that ByteDance divest its U.S. operations or face a nationwide ban. The law reflected bipartisan consensus on the potential threats posed by TikTok’s Chinese ownership, particularly given its massive user base and its growing role as a news source, with a Pew Research survey noting that 20% of adult Americans now regularly consume news on the platform, up from just 3% in 2020. President Trump, who initially supported a ban, delayed its enforcement multiple times, ultimately signing the September 25 executive order to facilitate a “qualified divestiture” that complies with the law. The order establishes a new U.S.-based TikTok entity, overseen by a seven-member board dominated by American cybersecurity and national security experts, with Oracle managing user data storage and licensing the app’s powerful recommendation algorithm.
At first glance, the deal appears to deliver a decisive victory for American interests. Trump, speaking at a press conference, emphasized the American character of the new entity, stating, “This is going to be American-operated all the way.” The involvement of prominent U.S. investors, including Oracle, media mogul Rupert Murdoch, and Dell CEO Michael Dell, reinforces this narrative. Oracle’s role is particularly significant, as it will provide cloud services for user data and manage a licensed copy of TikTok’s algorithm, a critical asset that drives the app’s addictive appeal. The White House has assured that ByteDance and Chinese officials will have no access to U.S. user data, addressing one of the primary concerns fueling the push for divestiture. The deal’s financial structure, with U.S. investors holding 65% of the new company and ByteDance’s stake diluted to below 20%, seems to align with the legal requirements set by Congress. Moreover, the agreement has been framed as a diplomatic achievement, with Trump claiming that Chinese President Xi Jinping personally approved the framework, stating, “I spoke with President Xi and he said, ‘Go ahead with it.’”
However, beneath this surface-level resolution lies a web of complexities that temper the deal’s apparent success. The most significant issue is the continued influence of ByteDance, which remains the single largest minority shareholder in the new U.S. TikTok entity. While the executive order emphasizes American control, ByteDance’s retention of intellectual property rights over the algorithm introduces a critical vulnerability. The algorithm, described as the “crown jewel of the business” by Mark Natkin of Marbridge Consulting, is not a static asset but a dynamic system requiring constant updates and retraining to maintain its effectiveness. Oracle and its partners will rely on ByteDance for these updates, as China’s export-control regime, in place since 2020, classifies personalized recommendation algorithms as sensitive technology subject to government approval. This arrangement raises doubts about whether Oracle can independently maintain the algorithm’s functionality or audit updates effectively, as noted by James Sullivan of JP Morgan, who remarked that the deal “lacked clarity on who is in control of the algorithm, leaving the national security concerns wide open.”
The structure of the deal further complicates matters. Sources cited by Reuters indicate that TikTok’s U.S. operations will be split into two entities: a joint venture handling user data and the algorithm, in which ByteDance holds a minority stake, and a separate division, wholly owned by ByteDance, managing e-commerce, advertising, and international operations. This division allows ByteDance to retain significant influence over revenue-generating aspects of the business, potentially undermining the notion of a clean break from Chinese control. John Moolenaar, chair of the House Select Committee on China, expressed concern that the deal may not fully preclude operational ties between the new entity and ByteDance, particularly regarding the algorithm. He emphasized that the 2024 law set “firm guardrails” to prevent such cooperation, suggesting that the deal’s structure could face scrutiny in Congress for failing to meet the legal standard of a complete divestiture.
The deal’s geopolitical implications extend beyond technical and legal concerns. The negotiations, which followed high-level talks in Madrid and a nearly two-hour call between Trump and Xi, reflect a broader context of U.S.-China trade tensions. China’s relative silence on the deal, with limited commentary from state media and no official response from ByteDance, contrasts with Xi’s reported approval, as relayed by Trump. A Chinese state-run news agency quoted Xi as supporting a “commercial solution” that complies with Chinese laws and balances both sides’ interests, while also urging the U.S. to avoid “unilateral trade restrictions” and provide a “non-discriminatory environment for Chinese investors.” This language, echoed by China’s foreign ministry spokesman Guo Jiakun, indicates that Beijing views the TikTok deal as part of a larger bargaining framework. Analysts like Dexter Roberts of the Atlantic Council suggest that China may have conceded ground on TikTok in exchange for concessions on other issues, such as U.S. export controls on AI chips or China’s purchases of American goods like Boeing planes and soybeans. This perspective frames the deal as a strategic maneuver rather than a straightforward resolution, with TikTok serving as a “diplomatic tool” for China, as noted in MarketWatch.
The involvement of non-American investors, such as the Emirati firm MGX, adds another layer of complexity. Despite Trump’s claim that the deal involves “American investors, American companies, great ones, great investors,” MGX’s participation raises questions about the deal’s alignment with its stated goal of American control. MGX’s investment coincides with broader Emirati efforts to secure U.S. approval for AI chip purchases and data center projects, suggesting that TikTok may be entangled in a web of international deals. Two Democratic senators have called for investigations into whether these transactions violate ethics rules, highlighting the potential for conflicts of interest. Michael Sobolik of the Hudson Institute questioned the need for “intense monitoring” of the algorithm if the U.S. truly controls it, arguing that such oversight implies lingering foreign influence. These concerns underscore the deal’s precarious balance between national security objectives and the realities of globalized investment.
For American users, the deal ensures TikTok’s survival, a priority for Trump, who credited the app with aiding his 2024 election victory and noted its popularity among “the young people.” His personal connection to the platform, bolstered by conservative activist Charlie Kirk’s encouragement to join it, underscores its cultural and political significance. Yet, the deal’s structure may have unintended consequences. A U.S. version of TikTok reliant on American user data alone, without access to ByteDance’s global dataset, could result in a less competitive and less engaging platform, as MarketWatch suggests. While this might reduce the app’s addictive pull—a potential benefit for American teenagers—it could also diminish its commercial viability, raising questions about the long-term sustainability of the $14 billion valuation, which pales in comparison to ByteDance’s $300 billion to $330 billion valuation or Meta’s $1.8 trillion.
The deal also sets a precedent for U.S.-China tech relations, with implications for cross-border investments. Chinese analysts like Tang Dajie of the China Enterprise Institute argue that the TikTok saga highlights the challenges faced by Chinese companies expanding abroad, particularly in navigating local laws and public perceptions of political motives. Conversely, American firms operating in China, which have long faced issues with data compliance and uneven regulatory enforcement, may face reciprocal scrutiny, as warned by James Zimmerman, a former chairman of the American Chamber of Commerce in China. The deal thus risks establishing a model of forced localization that could complicate global tech operations, with Beijing potentially responding to perceived unfair terms by tightening restrictions on U.S. companies.
There is no doubt that the TikTok deal represents a fragile compromise that addresses immediate national security concerns, but it also introduces new vulnerabilities. By licensing the algorithm rather than transferring its ownership, the U.S. trades direct Chinese control for a subtler form of dependence, one that is subject to Beijing’s export controls and geopolitical priorities. The involvement of ByteDance as a minority shareholder, the split structure of the U.S. operations, and the participation of foreign investors like MGX further muddy the waters, raising doubts about the deal’s alignment with the 2024 law. While the agreement allows TikTok to continue serving its millions of American users, it does so at the cost of ongoing uncertainty, both technological and diplomatic. With U.S.-China tensions simmering, the TikTok deal feels more like a shaky compromise than a solution, exposing the complex struggle to balance national security, economic priorities, and the intricate web of global tech reliance. Whether this arrangement proves to be a sustainable solution or a temporary truce remains to be seen, but it is clear that the deal has not fully resolved the tensions it sought to address.
With reporting by CNBC, MarketWatch, The New York Times, Reuters, and South China Morning Post.
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