In a significant development, President Trump signed an executive order on Thursday, effectively paving the way for a consortium of investors to take control of an American version of TikTok. This strategic move aims to sever ties with the app’s Chinese parent company, ByteDance, ensuring its continued operation within the United States.
For months, the administration has diligently sought non-Chinese investors for this American iteration of TikTok. Vice President JD Vance announced that the new entity would be valued at an impressive $14 billion.
This long-awaited agreement is designed to bring TikTok into compliance with a federal law enacted in January, which had banned the app in the U.S. due to escalating concerns that Beijing could exploit it to access sensitive American user data or disseminate propaganda. Despite the ban, President Trump had repeatedly postponed its enforcement. The recent executive order grants negotiators until mid-January to finalize the intricate details of the deal.
While the White House has yet to fully disclose the exact ownership structure of the U.S. TikTok, the roster of potential investors reportedly includes influential figures allied with Mr. Trump. Software giant Oracle, led by billionaire Larry Ellison, is confirmed to acquire a stake. Additionally, Mr. Trump indicated that media mogul Rupert Murdoch is involved, with sources close to the discussions confirming these investments would flow through Fox Corporation.
Adding an unexpected twist, the Emirati investment firm MGX is also slated to join the investor coalition, according to two individuals familiar with the ongoing talks. This revelation comes as a surprise, especially since Mr. Trump had previously emphasized that the new investors would be exclusively “American investors, American companies, great ones, great investors.”
Should this deal materialize, it would finally resolve years of uncertainty surrounding TikTok. Washington policymakers have expressed persistent worries about the app’s connections to China, even as its popularity has soared, attracting over 170 million American users. This prolonged dispute has caused considerable anxiety among users and frustration among lawmakers.
The $14 billion valuation for the American TikTok is notably lower than ByteDance’s overall valuation, which stands at an estimated $300 billion, according to start-up tracker CB Insights.
The involvement of MGX also underscores a broader pattern of Emirati financial support for Mr. Trump. In recent months, representatives from the Gulf State have committed to investing $1.4 trillion in the U.S. economy over the next decade. Furthermore, MGX reportedly deposited $2 billion into a cryptocurrency start-up founded by the Trump family.
The negotiations surrounding TikTok and the MGX cryptocurrency investment coincided with the Emiratis’ efforts to acquire advanced artificial intelligence chips. The Biden administration had previously restricted the Gulf State’s access to these chips due to concerns about its ties to China. However, the Emiratis had been actively lobbying the Trump administration to revise U.S. policy, enabling them to construct large-scale data centers and establish themselves as a leading AI hub.
During Mr. Trump’s visit to Abu Dhabi in May, his administration reached an agreement to sell the Emiratis 500,000 AI chips for a planned data center campus, which is set to become one of the world’s largest.
Sources familiar with the discussions indicate that MGX’s potential TikTok investment has been under consideration for several months. Notably, MGX is among several companies involved in the TikTok deal that could also benefit from the Emirati data center initiative. For instance, Oracle is scheduled to construct a data center in the Emirates, a project estimated to cost around $20 billion. Similarly, investment firm Silver Lake holds a stake in G42, an Emirati AI company that is a partner in that same project.
While there is no concrete evidence suggesting that the chip deal was contingent upon other transactions, two Democratic senators have formally requested investigations by the inspectors general at the Commerce and State Departments. They aim to determine whether Trump administration officials violated ethical guidelines in these multi-billion-dollar agreements with the Emiratis.
The executive order outlines a deal wherein ByteDance would license its proprietary algorithm to the new American TikTok company, which would be managed by a coalition of non-Chinese investors. These combined investments are intended to reduce ByteDance’s Chinese ownership stake to below 20 percent, thereby fulfilling the legal requirements.
According to two individuals familiar with the negotiations, Oracle, MGX, and Silver Lake would collectively hold approximately 45 percent of the company. Other investors are expected to acquire smaller stakes. Mr. Trump also mentioned Michael Dell, the CEO of Dell Technologies, as being among the investors. A key aspect of the plan is for Oracle to be responsible for safeguarding U.S. user data.
When contacted for comment, MGX, Oracle, and Silver Lake did not provide an immediate response. Fox Corporation and BDT & MSD Partners, an investment firm backed by Dell, declined to comment.
Mr. Trump has publicly stated that China’s top leader, Xi Jinping, has endorsed the fundamental framework of the deal. While a Chinese state-run news agency’s report on the call was less specific, it did suggest Mr. Xi’s apparent support for a commercial resolution to the TikTok situation.
Under the existing federal law regarding TikTok, the president is empowered to determine whether any proposed deal qualifies as a “divestiture” that meets the legal criteria. Thursday’s executive order formally declares that the proposed investor coalition framework satisfies these requirements.
The order explicitly states, “It will be majority-owned and controlled by United States persons and will no longer be controlled by any foreign adversary, since ByteDance Ltd. and its affiliates will own less than 20 percent of the entity, with the remainder being held by certain investors.”
However, the plan has drawn skepticism in Washington. John Moolenaar, the Republican chairman of the House Select Committee on China, expressed his concerns in a social media statement. He suggested that the licensing arrangement raises questions, implying that the new TikTok could still be subject to continued “control or influence” by China.
Michael Sobolik, a senior fellow at the Hudson Institute specializing in U.S.-China relations, echoed these concerns. He argued that the White House’s executive order would intensify such questions, particularly because it mentions that “the divestiture includes intense monitoring of software updates, algorithms and data flows.”
“If you control it, why would you need intense monitoring to know what’s happening with it?” Mr. Sobolik questioned. “Monitoring the algorithm is not the same as controlling it. That’s the apparent deception the administration seems to be attempting here.”