ByteDance, the Chinese parent company of TikTok, is expected to retain approximately 50% of the app's US profits under a deal negotiated by President Donald Trump, according to multiple reports .
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finance.yahoo.comThe arrangement involves a combination of licensing fees for TikTok's proprietary algorithm and a share of profits tied to ByteDance's remaining equity stake in the US operation, sources said .
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nypost.comThis structure would allow ByteDance to secure a significant portion of the revenue generated by the platform even after transferring majority ownership to American investors.The deal's valuation has sparked controversy, with Vice President JD Vance citing a $14 billion price tag for TikTok's US unit, far below the $35 billion to $40 billion estimates analysts had previously projected .
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nypost.comThis discrepancy has led to questions about the terms of the agreement.Under the draft plan, ByteDance would receive a licensing fee of 20% on incremental revenue from TikTok's algorithm, which could translate to $4 billion at $20 billion in sales, according to one source .
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finance.yahoo.comAdditionally, ByteDance would retain about 20% of profits from the remaining revenue through its equity stake, further bolstering its share of the US operation's earnings.The political and legal landscape surrounding the deal remains complex.President Joe Biden signed a law in 2024 requiring ByteDance to divest TikTok's US operations or face a nationwide ban, a measure Trump has repeatedly delayed by issuing executive orders to extend the deadline .
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pbs.orgTrump's intervention has allowed the sale to proceed, though Chinese officials have not publicly confirmed the agreement, leaving the terms of the transaction unresolved .
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nypost.comThe White House claims to have reached a deal with Chinese President Xi Jinping, but details remain unclear, with Vice President Vance acknowledging the final price will depend on investor negotiations .
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nypost.comAnalysts and experts have raised concerns about the undervaluation of TikTok's US operations.Ashwin Binwani, founder of Alpha Binwani Capital, called the $14 billion valuation "the most undervalued tech acquisition of the decade," arguing it reflects only a third of the company's true worth given its $16 billion in 2023 US revenue alone .
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nypost.comThe deal's political nature has also drawn scrutiny, with critics noting that it balances competing interests between the US government, corporate buyers, and Chinese regulators.Chinese officials have signaled openness to the sale, emphasizing that acquisitions should follow market principles, though they have not confirmed the agreement's terms .
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npr.orgThe legal framework for the sale remains contentious.The Biden-era law mandates a "qualified divestiture" of TikTok's US operations, a requirement Trump has interpreted broadly to allow ByteDance to retain a minority stake while transferring operational control to US entities .
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npr.orgHowever, legal experts caution that executive orders cannot override existing laws, and the 75-day extension Trump provided does not alter the original deadline set by Congress .
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pbs.orgThe deal's success hinges on proving that ByteDance has no operational influence over the app, a challenge that has complicated negotiations with lawmakers and regulators .
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npr.orgDespite the uncertainties, the deal represents a significant shift in the ownership structure of TikTok's US operations.Oracle Corp., Silver Lake Management, and Abu Dhabi-based MGX are among the potential buyers, with existing investors also rolling shares into the new entity to avoid tax liabilities .
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nypost.comThe arrangement underscores the delicate balance between national security concerns, corporate interests, and geopolitical tensions, as the US seeks to mitigate risks associated with Chinese ownership of a platform with over 170 million US users .
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pbs.orgThe resolution of this deal will have far-reaching implications for both the tech industry and international relations.As negotiations continue, the outcome will shape the future of TikTok in the US and set a precedent for how foreign-owned tech companies navigate regulatory and political landscapes in the United States.
