White House Drives TikTok U.S. Ownership Shift with Investors

white-house-tiktok-negotiations / Reuters

Talks Focus on Non-Chinese Investors Acquiring TikTok U.S.

The White House is spearheading discussions to reshape TikTok's U.S. operations, with a plan emerging for major non-Chinese investors in ByteDance, TikTok's parent company, to boost their stakes and take control of the app’s American arm, according to two sources familiar with the matter who requested anonymity due to lack of authorization to speak publicly. This strategy involves creating a standalone U.S. entity for TikTok, reducing Chinese ownership to below the 20 percent threshold mandated by U.S. law, effectively aiming to avert a looming ban on the popular short video app. Leading these negotiations are Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both ByteDance board members, alongside private equity giant KKR, as per the sources. This move comes amid heightened national security concerns in Washington over TikTok’s ties to China, balanced against its widespread use by nearly half of Americans and free speech debates surrounding a potential ban.

The legislative backdrop to these talks stems from a law effective January 19, 2025, compelling ByteDance to divest TikTok or face a nationwide shutdown, a measure passed in 2024 with strong bipartisan support over fears that Beijing could leverage the app for influence campaigns or data harvesting. President Donald Trump, upon taking office, issued an executive order delaying enforcement to April 5, 2025, providing a 75-day window to finalize a deal, with hints of possible further extensions. TikTok has countered these claims, asserting its U.S. user data resides on Oracle’s domestic cloud servers and content moderation for American audiences is handled stateside, distancing itself from Chinese influence. Under the proposed investor-led plan, Oracle would maintain its role as a data steward, ensuring no access from China, a detail emphasized by one source. This arrangement builds on an existing framework from Trump’s first term, reflecting a continuity in addressing security concerns while preserving TikTok’s operational viability in the U.S. market.

Investor Dynamics and TikTok U.S. Valuation Challenges

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The investor coalition driving this potential TikTok U.S. acquisition includes prominent ByteDance stakeholders with deep financial clout. Susquehanna International Group, General Atlantic, and KKR are at the forefront, with the Financial Times noting Coatue as another involved party, all aiming to buy out Chinese investors and secure a spun-off U.S. business. ByteDance’s ownership structure complicates matters, with global investors holding 58 percent, founder Zhang Yiming owning 21 percent, and employees, including roughly 7,000 Americans, controlling the remaining 21 percent, per last year’s legal filings. The valuation of TikTok’s U.S. operations remains a pivotal issue, with estimates ranging from $50 billion to $100 billion including its algorithm, or $40 billion to $50 billion without it, according to industry analyses. Reid Rasner, a Wyoming-based entrepreneur, recently bid $47.45 billion for the U.S. arm and its algorithms, underscoring the high stakes and competitive interest.

Beyond these established players, other contenders have emerged, intensifying the race to acquire TikTok’s U.S. presence. Frank McCourt’s Project Liberty has proposed a $20 billion deal excluding the algorithm, partnering with figures like Kevin O’Leary and Alexis Ohanian, while YouTube star Jimmy Donaldson, known as MrBeast, is exploring a role in this group. Trump has referenced negotiations with four distinct factions, though identities remain undisclosed beyond these known entities. The White House, unusually acting as a deal facilitator under Vice President JD Vance’s oversight, is providing strategic input, a role likened to that of an investment bank. This hands-on approach reflects the geopolitical and economic weight of the outcome, with the April 5, 2025, deadline looming large. Failure to secure a deal could see TikTok vanish from U.S. app stores, impacting 170 million users and sparking significant economic and cultural ripple effects.

National Security vs. Free Speech in TikTok Debate

The TikTok U.S. ownership shift is steeped in controversy, pitting national security imperatives against free speech principles. Lawmakers argue that ByteDance’s Chinese roots make TikTok a potential tool for Beijing’s influence operations, a view upheld by the Supreme Court’s January 17, 2025, ruling affirming the divestiture law. Critics, including free speech advocates, contend that banning the app unlawfully curbs access to foreign media, violating First Amendment rights, a tension that has fueled public and legal discourse. TikTok’s brief outage on January 18, 2025, followed by its swift return after Trump’s executive order, highlighted the app’s vulnerability and the urgency of a resolution.

Global Implications and China’s Stance

The international dimension of this deal adds further complexity. Chinese authorities have signaled resistance to a forced sale, with Beijing’s export controls potentially blocking the transfer of TikTok’s algorithm. ByteDance, valued at over $315 billion in its latest share repurchase, has remained relatively silent, engaging lightly in talks per Reuters’ March 17, 2025, report. The White House’s direct involvement, coupled with Trump’s shift from supporting a ban in 2020 to pledging to “save TikTok” after crediting it for his 2024 election victory, underscores the political stakes. Should the investor plan succeed, ByteDance would retain a minority stake, with Oracle overseeing data and software updates, preserving TikTok’s U.S. footprint while addressing security concerns.

Uncharted Territory in Tech Deal-Making

This White House-led effort marks an unprecedented foray into tech deal-making, blending governmental oversight with private sector ambition. The outcome will not only determine TikTok’s fate in the U.S. but also set a precedent for handling foreign-owned tech giants amid rising global tensions. With multiple bidders, fluctuating valuations, and a tight deadline, the TikTok U.S. ownership negotiations encapsulate a critical moment in digital governance, economic strategy, and international relations.