President Trump confirmed progress on a high-stakes TikTok deal as Beijing made it clear the app’s U.S. version will still run on Chinese-developed algorithm technology, despite long-standing national security concerns.
The Chinese government’s public stance arrives just as U.S. and Chinese officials finalize a framework to avoid banning the popular video platform, which boasts 172 million American users.
The agreement would create a new U.S.-based company valued at up to $50 billion, giving American investors a majority stake, while ByteDance, TikTok’s parent company based in China, retains a 19.9% stake.
Security officials in Washington have long raised alarms about the app’s recommendation engine, warning it could be used to spread propaganda or collect sensitive data.
Despite those concerns, the deal is moving forward.
Former President Donald Trump, who delayed TikTok’s ban through executive orders, is set to speak with Chinese President Xi Jinping on Friday to finalize the arrangement.
“The big Trade Meeting in Europe between The United States of America, and China has gone VERY WELL!” Trump wrote on Truth Social. “A deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save.”
The proposed structure would enable U.S. investors, such as billionaire Jeff Yass of Susquehanna International and Bill Ford of General Atlantic Partners, to take control of TikTok’s American operations.
Oracle co-founder Larry Ellison is expected to provide cloud infrastructure, while his son David Ellison—who recently acquired Paramount—may also take an ownership stake.
A key compromise in the deal would let the new U.S. company replicate TikTok’s algorithm rather than own it outright. Officials say this would create “essentially a US-created app,” distancing it from Chinese control while maintaining the platform’s core functionality.
TikTok has been under intense scrutiny for years.
Although the app is not available in mainland China, U.S. lawmakers have repeatedly raised concerns about data privacy and influence operations.
The Committee on Foreign Investment in the United States has investigated the company multiple times, and Congress passed bipartisan legislation mandating Chinese divestment.
The Supreme Court later upheld that law, paving the way for the current negotiations.
The extension that kept TikTok active in the U.S. was set to expire on Wednesday. Trump had reportedly considered letting the app shut down to gain leverage in broader trade talks, but the breakthrough deal appears to have prevented that outcome.