Investors in the recently concluded transaction to take over TikTok’s U.S. business will pay a fee of almost $10 billion to President Donald Trump’s government.
To prevent a U.S. ban on the short video app used by more than 200 million Americans, ByteDance, the Chinese owner of TikTok, finalized an agreement in January to create a joint venture with a majority American ownership that will secure U.S. data.
TikTok USDS Joint Venture LLC will apply data privacy and cybersecurity methods to secure user data, apps, and algorithms in the United States. A few specifics regarding the divestment were revealed.
In September, Vice President JD Vance stated that the new American corporation will be worth approximately $14 billion.
The payment is a component of the deal that allowed administration-friendly investors to take over ByteDance’s ownership of TikTok’s US operations. It is in addition to the money already spent on creating a separate company to run the app in the United States.
Investors Oracle, Silver Lake, Abu Dhabi’s MGX, and other supporters paid roughly $2.5 billion to the Treasury Department at the time of the deal’s closing and will continue to make payments until the total hits $10 billion.
The administration officials have defended the price by pointing to Trump’s role in saving TikTok’s U.S. operations and directing talks with China to finalize the agreement while addressing lawmakers’ worries about national security.
Retail investors in two of TikTok’s social media competitors filed a lawsuit against Trump and U.S. Attorney General Pam Bondi earlier this month in an attempt to overturn the U.S. president’s approval of a deal by the company’s Chinese owner, ByteDance, to create a joint venture with a majority American ownership.
