TikTok rescue deal includes $10 billion payment to Trump administration
Investors in a recently completed deal to take control of TikTok’s US business are set to pay the Trump administration a fee of roughly $10 billion, according to a report from the Wall Street Journal (WSJ).
Muhammed Selim Korkutata/Anadolu via Getty Images
Investors in a recently completed deal to take control of TikTok’s US business are set to pay the Trump administration a fee of roughly $10 billion, according to a report from the Wall Street Journal (WSJ).
The deal is part of the agreement that allowed investors friendly with the administration to gain control over TikTok’s US operations, people familiar with the matter told the WSJ. In January, TikTok's Chinese owner, ByteDance, finalized a deal to set up a majority American-owned joint venture to avoid a US ban.
Under the new deal, US TikTok users’ data will be handled by TikTok USDS Joint Venture LLC, which is owned by a group of investors, including Oracle. The venture is tasked with securing US user data, apps, and algorithms through data privacy and cybersecurity protections, although few details have been disclosed.
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According to Vice President JD Vance, the new US company will be valued at around $14 billion. Some tech analysts claimed that this valuation dramatically undervalues the company.
The investors, including Oracle, have already paid the Treasury Department about $2.5 billion when the deal closed in January and are expected to make several more payments until they reach the $10 billion total, according to the WSJ’s sources.
The fee covers the US government’s role in making the deal happen.
The investors include cloud-computing company Oracle, American private equity firm Silver Lake, and AI investment company MGX, which own over 80% of the company. ByteDance retains a 19.9% minority stake.
Trump had previously said, “The United States is getting a tremendous fee-plus—I call it a fee-plus—just for making the deal and I don’t want to throw that out the window.”
The unprecedented fee for a government helping arrange a transaction is justified, officials from the administration have said, highlighting Trump’s role in saving TikTok US operations and negotiating with China to close the deal while addressing the security concerns of lawmakers, the WSJ said.
At the time of the deal, Trump made a post on his social media app Truth Social, saying, “I am so happy to have helped in saving TikTok!”
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