Trump’s stance on TikTok discussions
The individual in question has established himself as a prominent figure in the realms of real estate and entertainment, notably through his ventures in reality television. He has now assumed a new position, guiding the future of TikTok in the capacity of an investment banker. In both public forums and private discussions, Trump has broached the subject of potential arrangements to bring the Chinese-controlled app under American oversight, framing it as a coveted asset for technology giants to compete for, a prospective candidate for a proposed American sovereign-wealth fund, and a significant bargaining tool in trade talks with Beijing.
“Significant enthusiasm for TikTok!” It would be advantageous for China, as well as all parties involved,” he recently stated on Truth Social. A number of firms have indicated a private interest in engaging in a transaction involving TikTok or its U.S. operations, with Oracle, Amazon, and Microsoft among those mentioned by sources acquainted with the situation. TikTok and its supporters are advocating for alternatives that could bypass a sale, instead reviving a proposal the company claims would safeguard the data of American users.
In a notable development last week, TikTok’s Chief Executive Shou Chew engaged with high-ranking officials at the White House, presenting a proposal that outlined a potential joint venture involving U.S. investors. The proposed new venture is set to be based in the United States and will manage data security, as per an individual acquainted with the details of the plan. The management structure will be predominantly based in the United States, with a board of directors composed primarily of U.S. members. The involvement of the U.S. government as an investor remains uncertain. On Monday, Trump mandated the establishment of a sovereign-wealth fund, proposing its potential use for the acquisition of TikTok—a notion that numerous analysts regard as implausible.
In the interim, Trump has appointed Vice President JD Vance to lead the negotiations, banking on Vance’s experience in venture capital and connections in Silicon Valley to broker a successful agreement. Trump’s involvement and his newfound enthusiasm for the app have sparked a sense of optimism within TikTok’s ranks regarding a potential long-term resolution to remain operational in the United States. The deadline is set for April 5, though an extension by Trump remains a possibility. However, his actions have also sparked uncertainty regarding the specifics of any potential agreement and the parties that would be engaged.
“The president has unequivocally expressed his desire for TikTok to persist.” A source familiar with the company indicated that he has resolved, in his capacity as dealmaker-in-chief, to identify a viable path forward. However, the individual noted that discussions surrounding a sovereign fund had complicated the dialogue. “The absence of a sovereign-wealth fund remains a notable gap…”Time is of the essence. On inauguration day, Trump issued an executive order that postponed the enforcement of a bipartisan law enacted the previous year, which mandates TikTok to divest its Chinese ownership or cease operations in the United States, for a period of 75 days. Advocates of the legislation contend that the Chinese government might exert influence over its domestic company, ByteDance, compelling TikTok to engage in surveillance or disseminate propaganda targeting American citizens—a position that TikTok has firmly rejected.
Trump has articulated various possible scenarios, at times proposing that a U.S. entity or even the nation itself should take ownership of TikTok, while at other moments suggesting that American investors might simply enhance their investments in its parent company. ByteDance has indicated that approximately 60% of its ownership is held by global institutional investors, a significant portion of which comprises major U.S. financial firms, including BlackRock, General Atlantic, and Susquehanna International Group, the latter co-founded by prominent Republican donor Jeff Yass.
Chinese officials have communicated to ByteDance their interest in negotiating a resolution with the U.S. regarding the ongoing dispute. Following an attempt to prohibit TikTok in 2020, Trump subsequently adopted the platform during his most recent presidential campaign, recognizing its potential as a formidable instrument in the political arena. He was somewhat influenced by Kellyanne Conway, a senior adviser during his initial term, who has lobbied on behalf of TikTok supporters to promote its interests. She informed him that his platform boasted a greater number of supporters than those of Kamala Harris or Joe Biden, noting that numerous young individuals had created videos endorsing him. She also carried out polling indicating that Americans did not perceive a ban on TikTok as the most effective strategy to address concerns regarding China.
During a December gathering with the CEO of TikTok at Mar-a-Lago, Trump made a call to his son, Barron, to boast about his performance metrics on the platform, mentioning that the company’s CEO had traveled to meet him. “I intend to rescue TikTok,” he remarked to an adviser following that meeting. Negotiations regarding TikTok are anticipated to be integrated into wider discussions on trade and tariffs that will unfold in the forthcoming month. As of late Friday, expectations for a conversation between Trump and Chinese leader Xi Jinping had not materialized. Staff members at the White House have been in dialogue with their Chinese counterparts, as reported by sources familiar with the discussions, in an effort to establish the framework for forthcoming negotiations. The two engaged in a discussion regarding TikTok, along with various other matters, during a call on January 17.
Chinese officials in Beijing have indicated to ByteDance their willingness to negotiate with the U.S. to settle ongoing disputes. They have expressed openness to the possibility of a U.S. sovereign-wealth fund acquiring a substantial stake in TikTok, according to sources familiar with the discussions. They expressed optimism that an agreement might assist Beijing in its negotiations regarding tariffs and various other matters.
Trump has actively sought to attract potential suitors, seemingly aiming to generate heightened interest. “I appreciate bidding wars as they often lead to optimal agreements.” “A bidding war is indicative of a favorable situation,” he remarked to reporters during his journey on Air Force One late last month. On his second day in office, he informed a gathering of reporters of his intention to endorse Elon Musk’s acquisition of the app. He subsequently expressed his openness to the prospect of Larry Ellison, the chairman of Oracle, making a purchase. When questioned during the Air Force One journey about Microsoft’s potential involvement, Trump responded affirmatively: “I would say yes.” There is considerable interest in TikTok.
The president has expressed openness to the prospect of Larry Ellison, chairman of Oracle, acquiring TikTok. A few days later, he proposed the notion that the U.S. might acquire a 50% stake in TikTok, before this week expressing his desire to create a U.S. sovereign-wealth fund. Trump has asserted that his authority over TikTok’s future warrants the U.S. government a significant share in any resulting entity. “Should I endorse this, it will likely attract a buyer willing to invest significantly, generate numerous employment opportunities, maintain an operational platform, and ensure robust security measures.” “If I refrain from signing, then it will come to a close,” he stated.
His role has effectively sidelined traditional investment banks from what may emerge as one of the most significant transactions in recent memory, excluding the bankers who usually offer greater transparency to prospective bidders. “It is without precedent for a president to involve himself in the sale of a private asset,” remarked Darrell West, a senior fellow at the Brookings Institution with expertise in technology. “Presidents generally place their confidence in the market to fulfill those roles.” During his initial term, Trump attempted a comparable approach. Following the commencement of a campaign to prohibit TikTok, he endorsed a provisional agreement aimed at preserving the platform, wherein Oracle and Walmart would acquire stakes in a U.S.-operated version of TikTok. The accord ultimately failed to come to fruition.
Investor consortia are emerging with a diverse array of proposals regarding the structuring of potential deals. A consortium spearheaded by billionaire Frank McCourt, featuring Kevin O’Leary, the prominent figure from “Shark Tank” known as Mr. Wonderful, has put forth a bid exceeding $20 billion. A separate consortium of investors has proposed the establishment of a special purpose vehicle aimed at acquiring TikTok and channeling funds into Musk’s artificial intelligence venture, xAI, with the intention of leveraging TikTok’s algorithm for operational purposes, as reported by a source familiar with the discussions. ByteDance and its investors are working to persuade Trump that a prior proposal to migrate U.S. user data to Oracle’s cloud adequately addresses security apprehensions, according to sources familiar with the matter.
TikTok initiated Project Texas during the Trump administration to persuade the Committee on Foreign Investment in the U.S. that it could address American national security issues while remaining linked to its Chinese parent company. TikTok executives were of the opinion that had Trump secured re-election in 2020, he would have endorsed Project Texas as a remedy to the apprehensions expressed by lawmakers. Negotiations with Washington regarding the initiative ultimately disintegrated during President Biden’s administration.
