TikTok Deal Nears as Trump and Xi Prepare Key Talks
A breakthrough deal over TikTok’s future in the United States may be within reach, with US President Donald Trump and Chinese President Xi Jinping expected to discuss terms on Friday.
Negotiators from both sides have reportedly agreed on a “framework” plan, which could see TikTok’s US operations sold to a consortium of American companies. If finalized, the deal would mark a rare success in US-China trade relations and potentially resolve years of uncertainty for TikTok’s 170 million American users.
What’s on the Table?
Reports suggest TikTok’s US arm could be acquired by a group including Oracle and investment firms Andreessen Horowitz and Silver Lake. However, the most sensitive issue remains TikTok’s algorithm—the “secret sauce” that powers its content recommendations and global popularity.
Beijing has long refused to give up control of the algorithm, viewing it as a critical national asset. But in a surprise move, China’s top cybersecurity regulator has signaled that ByteDance (TikTok’s parent company) may license the technology to a US buyer without handing it over completely.
Analysts believe this would give Washington partial oversight while allowing Beijing to protect its most valuable intellectual property. As one expert explained:
“It makes no business sense for ByteDance to surrender its crown jewel when a lighter version of the software can keep the app running.”
This compromise could mean a US-specific version of TikTok, possibly with fewer features or reduced diversity in content compared to the global app.
Political and Security Roadblocks
US officials remain cautious. Lawmakers on both sides of the aisle have raised concerns about national security, warning that a licensing deal may not fully prevent Chinese government influence.
The debate follows years of scrutiny over TikTok’s handling of user data. Concerns led to legislation signed last year requiring TikTok to divest its US operations or face a nationwide ban.
While Trump has softened his stance—crediting TikTok with helping him connect with younger voters in the 2024 election—the final decision still faces congressional approval and could spark political battles in Washington.
Beijing’s Strategic Gain
For China, the deal offers more than just a compromise. By keeping the algorithm in Beijing while allowing TikTok to remain in the US market, ByteDance retains control of its most valuable asset. At the same time, the company secures continued access to the lucrative American advertising market, which generates nearly half of TikTok’s global revenue.
Experts say this arrangement could also serve as a “TikTok template” for other Chinese firms. Licensing agreements could pave the way for companies in critical sectors—such as batteries or rare earths—to expand into the US while maintaining Beijing’s leverage over technology exports.
Why It Matters
TikTok is one of the few global social media giants not born in the US, and its American market is uniquely profitable. In 2024, ByteDance reported $39 billion in revenue, with TikTok accounting for $30 billion. Average revenue per US user is estimated to be five to 10 times higher than in other regions.
Losing the US market would be a significant blow. But under the current plan, TikTok stays in the US, ByteDance retains its stake, and Beijing secures long-term bargaining power in trade negotiations with Washington.
What’s Next?
Deals of this scale take months—sometimes years—to finalize. ByteDance’s board must approve any arrangement, and Washington’s unpredictable political climate could throw up fresh hurdles.
Still, the talks mark a rare sign of cooperation between the US and China at a time of strained relations. For Beijing, it’s a chance to buy time and preserve leverage in broader trade disputes. For Washington, it’s an opportunity to claim victory on national security while keeping a hugely popular app available to American users.
As one analyst put it:
“A US TikTok will look the same on the surface. But behind the scenes, it will run on borrowed code, firewalled data, and political trust that could vanish overnight.”