TikTok may soon be majority owned by American investors if a deal between the U.S. and China goes through.Dado Ruvic/Reuters
U.S. President Donald Trump signed an executive order this week declaring that a pending deal to sell TikTok’s U.S. operations would meet the national security requirements of a 2024 American law that banned the app.
The new U.S.-based company will be valued at about US$14-billion, according to Vice-President JD Vance.
It’s a sign of progress in talks between the U.S. and China over the popular app’s ownership, though the agreement is not final and some key details are missing.
The news marks another chapter in the years-long saga that has seen U.S. politicians struggle with concerns about potential surveillance through the Chinese-owned app while contending with its popularity among voters, particularly young people.
Here’s what you need to know about the proposed deal, how we got here and what it means for Canadians.
What is TikTok and why is its ownership a political issue?
TikTok is a popular short-form video social-media app with 170 million users in the United States and 14 million in Canada. TikTok users skew younger, with two-thirds of U.S. users aged 35 and under.
Western governments, including Washington and Ottawa, have scrutinized the app over national-security concerns related to its Chinese ownership. It is currently owned by Beijing-based firm ByteDance.
Politicians across the ideological spectrum have taken issue with TikTok’s ownership structure, all the while leaning on the app’s popularity to spread their messages and reach young voters.
Mr. Trump tried to force ByteDance to divest from TikTok in the U.S. during his first presidential term, in 2020, but was blocked by the courts.
TikTok CEO Shou Zi Chew testifies before U.S. Congress in 2023, taking questions on data privacy.EVELYN HOCKSTEIN
The U.S. banned TikTok from government devices in 2022 over concerns about the app’s collection and use of users’ personal information – and a Chinese law that allows the government to demand companies hand over data when requested.
In 2023, TikTok chief executive Shou Zi Chew testified before Congress and repeatedly denied that the app has connections to or shares data with the Chinese Communist Party.
The U.S. House of Representatives passed a bill the following year that would give ByteDance about six months to divest TikTok’s U.S. assets or face a ban. Then-president Joe Biden gave ByteDance until January, 2025, to sell TikTok or see it removed from U.S. app stores and hosting sites.
The looming ban saw users bidding farewell to the app – it even sparked a trend of tongue-in-cheek meme videos in which Americans bid adieu to their “designated Chinese spy” – and TikTok was briefly removed from the app store for U.S. users in January.
Mr. Trump revived it after taking office and pledged to work on a deal that would satisfy the requirements of the 2024 law and keep TikTok in the U.S.
He has repeatedly delayed the ban from taking effect, and it is currently on hold until Jan. 20, 2026.
People gather in Washington to protest a TikTok ban in 2023.BRENDAN SMIALOWSKI/AFP/Getty Images
What do we know about the deal?
The deal has not yet been finalized and a full slate of investors has yet to be announced.
A mix of U.S. and global companies will control the new U.S. TikTok, with ByteDance still holding a stake.
The final ownership breakdown was not final as of Thursday, but Reuters has reported that Oracle ORCL and private-equity firm Silver Lake will take a major stake.
Mr. Trump’s executive order says TikTok’s algorithm will be retrained and monitored by the new U.S. company’s security partners, and operation of the algorithm will be under the control of the new joint venture.
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The U.S. government will not take a board seat or receive a golden share in the new entity that will own TikTok US. It is unclear if the U.S. government will receive payments as a condition of approval.
China has not confirmed if it has approved the deal.
Once signed, the agreement will require regulatory approval.
Who are the business names involved?
A number of Mr. Trump’s corporate allies are involved in the deal, according to the President.
Oracle founder Larry Ellison at the White House in February.Elizabeth Frantz/Reuters
He has said media mogul Lachlan Murdoch, son of Fox News founder Rupert Murdoch and heir to his corporate empire, will be involved as a U.S. investor.
Others include Oracle founder Larry Ellison – one of the world’s richest men – and Dell CEO Michael Dell, Mr. Trump said.
ByteDance’s current investors include Susquehanna International Group, General Atlantic and KKR.
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What roles do the U.S. and China play in the deal?
High-ranking U.S. and Chinese officials were heavily involved in the talks about TikTok’s U.S. operations and ownership.
Mr. Trump and Chinese President Xi Jinping have spoken directly about the plan, and Mr. Trump suggested Mr. Xi approved of it.
“We had a good talk, I told him [Mr. Xi] what we were doing, and he said go ahead with it,” Mr. Trump said on Thursday.
China and Mr. Xi have not confirmed their approval of the deal.
The recent progress on TikTok has been a rare breakthrough in a tense period for the trade relationship between the world’s biggest economies, after Mr. Trump’s tariffs set off a trade war that has roiled financial markets.
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How does this affect Canadians?
In Canada, TikTok is available to the general public, but is banned from government devices.
Last year, Ottawa ordered the company to wind down its Canadian operations, citing national security risks, but decided not to block content or usage for the Canadian public. TikTok’s CEO asked to meet with Industry Minister Mélanie Joly in July about the order, arguing the move will cost jobs and does not reflect the fact the U.S. no longer plans to ban the app.
Federal Treasury Board spokesperson Martin Potvin said TikTok is still barred from use on government-issued devices, and that the government’s digital tools policies are reviewed on a regular basis.
Justin Simard, spokesperson for Innovation, Science and Economic Development Canada, said the department could not comment on the order to wind up TikTok Canada’s business for confidentiality reasons, and because TikTok has challenged the decision in court.
In July, TikTok’s CEO asked to meet with Industry Minister Mélanie Joly about an order for the company to wind down its Canadian operations.Sean Kilpatrick/The Canadian Press
It’s not clear which version of the app will be used in Canada.
But for Canadians, the transfer of ownership to the U.S. could raise a new type of national security concern, particularly as Mr. Trump has repeatedly sought to assert influence over Canada, according to Daniel Tsai, an adjunct professor of law and business at Toronto Metropolitan University.
“We have to view this change of ownership with a skeptical lens,” Prof. Tsai said in a phone interview.
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He noted that Mr. Trump and Mr. Xi were involved in the talks, raising doubts about the independence of the new business entity.
Prof. Tsai also highlighted the involvement of Mr. Trump’s allies in the business and potentially its algorithm – and how that might affect the content Canadians see on the app.
He noted the changes that took place on X, formerly known as Twitter, after billionaire Elon Musk bought the site in 2022, and said Canadian regulators should keep TikTok’s ownership structure in mind as more details about the deal emerge.
“Do Canadians feel they trust the Americans to be in that gatekeeper role, especially if investors that purchase TikTok in the United States are Donald Trump supporters and acolytes?”
With reports from Reuters, the Associated Press and Globe staff