TikTok deal won’t include ‘golden share’ or equity for U.S., Trump administration says
News Summary
The Trump administration announced that a preliminary deal to keep TikTok operating in the United States will not involve the federal government taking an equity stake or a “golden share” in the social media company. The core of the agreement involves TikTok's U.S. operations being based in the states as a new joint venture with a board of directors that will have a majority of American members, none of whom will be selected by the government. Tech giant Oracle will oversee TikTok's security operations in the U.S. President Trump is expected to sign an executive order later this week backing the proposed deal and once again extending the deadline by which TikTok could face a U.S. ban. A senior White House official expressed confidence that China has approved the deal and that it will not face regulatory hurdles. This approach contrasts with the Trump administration's previous actions of securing golden shares or equity stakes in companies like U.S. Steel and Intel. ByteDance, TikTok’s Chinese parent company, faces a federal law requiring it to divest its American business or be shut down in the U.S. due to national security concerns, a deadline Trump has repeatedly extended.
Background
TikTok has raised national security concerns in the U.S. due to its Chinese parent company, ByteDance, and its powerful content algorithm. A federal law, passed with bipartisan support in Congress, mandates ByteDance to either divest its U.S. business or face a ban in the United States. President Trump, despite expressing his liking for TikTok, has repeatedly extended the divest-or-ban deadline. Notably, the Trump administration previously secured a “golden share” in U.S. Steel and an equity stake in Intel, with a golden share effectively granting the government veto power over key business decisions. The decision for the TikTok deal not to include a “golden share” or equity therefore marks a potential shift in the administration's intervention approach.
In-Depth AI Insights
What does the absence of a 'golden share' or equity stake in the TikTok deal reveal about the Trump administration's evolving strategy towards Chinese tech firms? - This signals a shift from direct ownership/veto power (seen with U.S. Steel, Intel) to a model emphasizing operational control and data security oversight by trusted U.S. partners (like Oracle). - This approach might be politically more palatable to China and Chinese firms, potentially setting a precedent for future U.S.-China tech compromises. - It suggests a recognition that direct equity ownership might complicate international business relations or be less effective than robust data governance. How might this specific deal structure impact the competitive landscape for social media and data security firms in the U.S. and globally? - For Oracle, this solidifies its position as a critical infrastructure provider in cloud security and data management, potentially opening doors for similar oversight roles with other foreign tech entities operating in the U.S. - For TikTok, retaining its algorithm under U.S. operational control, rather than full divestment, allows it to maintain its core competitive advantage and user experience, potentially limiting market share gains for rivals like Meta Platforms or Snap Inc. - The precedent of U.S. operational control without equity might encourage other nations to seek similar arrangements with foreign tech companies, fragmenting global digital governance. What are the underlying geopolitical and economic considerations driving Trump's repeated extensions and eventual acceptance of this deal structure for TikTok? - Strategic Delay and Leverage: The Trump administration likely used repeated extensions as a bargaining tactic to extract more favorable terms while avoiding the economic and diplomatic fallout of an outright ban on ByteDance, particularly as it seeks stability in its second term. - Domestic Political Balancing Act: Given TikTok's immense popularity among young Americans, an outright ban could trigger significant domestic political backlash. The current solution balances national security concerns with appeasing a large user base, potentially benefiting Trump's future political standing in a hypothetical 2028 run. - Tech Sovereignty vs. Control: The ultimate goal appears to be ensuring control over critical data and algorithms remains within U.S. purview, rather than outright exclusion of Chinese technology. This 'trust but verify' model, overseen by a U.S. company (Oracle), secures national security interests while avoiding an ownership impasse.