Trump signs executive orders to put TikTok under US ownership

US President Donald Trump has signed an executive order that will allow TikTok to continue operating in the United States in a way that meets national security concerns laid out by the law.

According to the White House, the order will ensure that a US version of TikTok, owned by a consortium of American investors, operates in the country. This will also result in Chinese ownership being reduced to 20 percent. Investment firms Silver Lake Management, Silicon Valley powerhouse Andreeessen Horowitz and Oracle are said to be a part of this deal.

Watch: End of road for TikTok in US?

Xi gives nod

Last year, Trump’s predecessor Joe Biden signed a legislation calling for China's ByteDance to sell TikTok's assets to an American company by early this year or face a nationwide ban, but Trump has repeatedly signed orders that have allowed TikTok to keep operating in the US as his administration tries to reach an agreement for the sale of the social media company.

Much is still unknown about the actual deal in the works, but Trump said on Thursday that Chinese leader Xi Jinping has approved it. 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, Faceboo,k and Instagram, according to a Pew Research Centre report published on Thursday.

Trump allies on board

Though the details of the deal have yet to be finalised, the investment group's total stake in the new venture would be around 80 per cent, while ByteDance is expected to have a 20 per cent, or smaller, stake in the entity. 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 matters or related committees.

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 into the platform.

Also read: US Senate passes bill forcing TikTok's parent company to sell or face ban

Although he stepped down as Oracle's CEO more than a decade ago, Ellison remains heavily involved in its operations, as chairman and chief technology officer. Now at 81, he could be in line to become a behind-the-scenes media power player, having already helped finance Skydance's recently completed USD 8 billion merger with Paramount, a deal engineered by his son, David.

"The proposed divestiture would allow the millions of Americans who enjoy TikTok every day to continue using it while also protecting national security," Trump said in the order.

Algorithm conundrum

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

With most investors being his allies, Trump, however, said that the app wouldn’t take any political line.

"If I could make it 100 percent MAGA I would, but it's not going to work out that way unfortunately. No... every group, every philosophy, every policy, will be treated very fairly," he told reporters.

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 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.

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American officials previously warned 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, who can use it to shape messaging on the platform in a way that's difficult to detect, but no evidence has ever been presented by US officials showing that China has attempted to do so.

Changed tactics

Trump, during his first term, signed an executive order attempting to ban the app if it didn't split off its US business, warning that TikTok's "data collection threatens to allow the Chinese Communist Party access to Americans' personal and proprietary information".

Trump has since changed his approach to TikTok, often citing its role in helping him reach young voters in the 2024 presidential election.

Although the details remain unclear, a Trump administration official said that a licensed copy of the ByteDance created algorithm — retrained solely with US data — will power the new US version of the app. Administration officials say this retraining effort will nullify any risk of Chinese interference and influence.

Vice President J D Vance said "we wanted to keep TikTok operating" but address security concerns so that "Americans can use TikTok but use it with more confidence than they had in the past".

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Young people especially "really wanted this to happen", Trump said during the signing ceremony.

What will Beijing demand in return?

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.

Following the announcement of a possible TikTok framework deal after US-China trade talks in Spain, some observers believed that China was able to extract concessions from the US on loosening trade restrictions in exchange for the TikTok deal. Others believe China was willing to do so to pave the way for a meeting between Xi and Trump.

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A TikTok deal would allow China to keep the ball rolling on trade negotiations, Sun Yun, director of the China program at the Washington-based think tank Stimson Center told AP. "TikTok alone does not compare with the importance of an amicable US-China relations and the positive momentum that prevents many negative development from happening." Dimitar Gueorguiev, associate professor of political science at Syracuse University, said TikTok has become an "expendable concession" to Beijing because it is no longer a disruptive newcomer as it was five years ago.