In a significant move, President Donald Trump has signed an executive order allowing American investors to acquire the U.S. operations of TikTok, the widely-used Chinese video platform. The newly formed TikTok U.S. corporation, born out of this order, is valued at approximately $14 billion. This strategic shift is set to reshape TikTok's business landscape in the United States, establishing a joint venture where U.S. investors will hold a majority stake, limiting ByteDance, TikTok's parent company, to less than 20%.
The order mandates that critical operations, including the management of TikTok's video recommendation algorithm and the safeguarding of U.S. user data, will be conducted on American soil. Oracle has been appointed to manage these aspects, ensuring that sensitive data is stored securely within the United States.
During the announcement, President Trump highlighted the participation of prominent investors such as Larry Ellison, Michael Dell, and Rupert Murdoch, emphasizing their longstanding contributions to the American economy. He assured that the U.S. business of TikTok would be controlled by American enterprises and investors, describing them as "great companies and great investors."
The executive order follows a backdrop of negotiations between the U.S. and China, with President Trump previously stating that he had reached an agreement with Chinese President Xi Jinping on the sale. This development comes in light of the 'TikTok Ban Law' enacted by the U.S. Congress, which prohibits TikTok's operations in the U.S. unless its business rights are transferred to an American company.
Secretary of the Treasury, Scott Besant, who was present at the signing ceremony, explained that the deal presents a favorable opportunity for investors, with the ultimate decision resting on them to determine the investment's value. Reports suggest that Oracle, along with other significant entities like Silver Lake and MGX, are poised to hold substantial stakes in TikTok's U.S. entity.
Despite initial resistance from China, Vice President JD Vance, who spearheaded negotiations, stated that the executive order aligns with legal requirements to protect American data privacy while allowing TikTok to continue operations.
This acquisition is seen as a strategic move by President Trump, recognizing TikTok's influence among young voters, who played a crucial role in his previous electoral victory. The administration has delayed the full enforcement of the 'TikTok Ban Law' to facilitate the transition and ensure continuity for TikTok's extensive user base in the U.S.
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