A new joint venture, in which American investors and board members hold the majority, is expected to take over the U.S. operations of the Chinese video platform TikTok.
According to foreign media on the 22nd (local time), a senior White House official said on a conference call that "President Donald Trump and Vice President J.D. Vance have been negotiating for another outstanding deal for the American people," and outlined key elements to be included in the TikTok agreement.
The official said, "TikTok's U.S. operations will transfer to a new joint venture that will be located in the United States," adding, "The joint venture will be majority-held by American investors and owners, and the board will also be majority American."
The U.S. software corporations Oracle is expected to take charge of security for the new joint venture. The official said, "Oracle will provide end-to-end security related to how the TikTok app is installed on phones and interacts with phones, how it is updated, how Americans' data is stored, and how the content recommendation algorithm works."
Regarding the algorithm issue, the official noted, "We had to craft a compromise that meets the requirements of not only U.S. law but also China's domestic law," adding, "It was a very difficult point in the negotiations."
The official added, "A copy of the content recommendation algorithm will be brought to the new U.S. joint venture, where a security firm will thoroughly inspect it and have it retrained based on U.S. user data."
TikTok, which is highly popular in the United States with more than 170 million American users, has raised concerns that it could be used for China's theft of personal information or hacking because its parent company is China's ByteDance. In response, the U.S. Congress enacted the "TikTok ban law" last year, which would ban TikTok service in the United States unless TikTok's U.S. business rights are sold to U.S. corporations.
The Trump administration, saying it would allow Americans to continue using TikTok, delayed enforcement of the law and negotiated with China on a plan for U.S. corporations to acquire the major shareholders' equity in TikTok, and recently said the two countries reached a broad agreement. Under the deal, the newly established entity would have about 80% of its equity held by U.S. investors including Oracle, while ByteDance's stake would be reduced to under 20%. Six of the seven board seats would be held by Americans, and the one seat designated by ByteDance would be excluded from the security committee.
The official said, "President Trump is expected to sign an executive order later this week," which will include language that "the terms of this TikTok transaction meet national security needs and constitute a legally eligible asset sale."
The executive order is also expected to extend the current sanctions grace period to allow investors and TikTok to complete the paperwork needed to close the transaction. As a result, the official projected that transactions related to TikTok will be finalized 120 days after the executive order is signed.