A coalition of American venture capital firms, private equity funds, and technology companies has structured an agreement to acquire operational control of TikTok’s United States business through a newly established domestic entity, according to sources familiar with the negotiation framework.
The proposed arrangement, developed during US-Chinese diplomatic discussions in Madrid this week, closely resembles an earlier proposal presented to President Donald Trump in April, before escalating tariffs on China disrupted negotiations over the popular social media platform.
The American investment group would control approximately 80 percent of TikTok’s domestic operations, with Chinese stakeholders retaining the remaining 20 percent ownership. Oracle, Andreessen Horowitz, and Silver Lake represent key participants in the consortium, sources indicated. A majority-American board would govern the new entity, including a Trump administration appointee.
Executive Order Extension Provides Breathing Room
Trump signed an executive order Tuesday extending TikTok ban enforcement by three months, preventing the application from shutting down Wednesday when the previous extension expired. This marks the fourth extension since the ban initially took effect January 19, one day before Trump assumed office.
The administration announced Monday that a comprehensive agreement between the United States and China has been reached to maintain TikTok’s long-term American operations, though specific details await final approval.
Treasury Secretary Scott Bessent revealed Tuesday that China ultimately agreed to the arrangement following Trump’s threat to permanently shut down TikTok in the United States. The breakthrough came after a crucial conversation between Bessent, Ambassador Jamieson Greer, and President Trump during initial negotiations.
“President Trump made it clear he would be willing to let TikTok go dark,” Bessent explained, describing the pivotal moment that shifted negotiations.
Deal Structure and Timeline
The majority of the acquisition framework was completed by April, according to Bessent, but Trump’s “Liberation Day” tariffs created an embargo on Chinese goods that stalled TikTok discussions. Once tariffs were reduced and diplomatic talks resumed, both leaders expressed renewed interest in finalizing the social media agreement.
Critical details required resolution, including addressing national security concerns and securing China’s approval for the transaction structure. Bessent emphasized that the administration refused to compromise national security considerations for deal completion.
“We reached agreements primarily for things we will not be doing in the future that will have no impact on national security,” Bessent stated.
Oracle’s Central Role
Oracle executive chairman Larry Ellison, recently the world’s wealthiest individual, has been widely speculated as a key participant in TikTok’s American acquisition. Trump previously endorsed Ellison, a political supporter, as a preferred buyer for TikTok’s domestic assets.
Oracle maintains existing TikTok relationships, having hosted the platform’s American user data since 2020. The company briefly negotiated a TikTok acquisition with the first Trump administration before that arrangement was ultimately blocked.
Legal and Regulatory Framework
Congressional legislation signed by former President Joe Biden restricts Chinese ownership in TikTok’s American operations to maximum 20 percent, preventing Trump’s previously suggested 50-50 joint venture with ByteDance. The bipartisan law mandating TikTok’s Chinese divestment creates strict ownership limitations for any final agreement.
Bessent indicated that deal terms and investor identities would be disclosed within days or weeks, pending Friday’s anticipated phone conversation between Trump and Chinese leader Xi Jinping to formalize the arrangement.
Strategic Implications
The TikTok agreement represents a crucial prerequisite for broader US-China diplomatic engagement. American officials confirmed Monday that resolving TikTok’s ownership structure was essential for arranging a potential Trump-Xi meeting, possibly occurring next month.
“President Trump showed great leadership and fortitude for what he wanted to see on this deal,” Bessent commented. “I think it is highly satisfactory for US interests.”
The White House cautioned that framework details remain speculative until official administration announcements, though sources suggest substantial progress toward resolving the months-long diplomatic standoff over the popular social media platform’s future American operations.
