What’s in the U.S.-China deal for an American TikTok spinoff

William Brangham:

After a call with Chinese President Xi Jinping today, President Trump said a deal to spin off an American version of the wildly popular social media app TikTok is — quote — "well on its way."

A Chinese company developed and owns the app, which raised concerns in the U.S. over national security and data privacy.

Nick Schifrin begins our coverage.

Nick Schifrin:

From communicative cappuccinos…

(Singing)

Nick Schifrin:

… to presidential pop, TikTok is a social media juggernaut.

Man:

It's a piece of cake.

Nick Schifrin:

With nearly two billion global users, including 170 million Americans. And, thanks to President Trump, it turns out that TikTok has nine lives.

Donald Trump, President of the United States: The young people of this country want it badly. The parents of those young people want it badly.

Nick Schifrin:

Despite a law requiring TikTok to be banned in the U.S. if it doesn't sever ties with its Chinese parent company, President Trump now says he made a deal today with Chinese President Xi Jinping to save TikTok.

Donald Trump:

We're going to have very good control. We have American — these are American investors.

Nick Schifrin:

An official familiar with the deal tells "PBS News Hour" TikTok U.S. will be controlled by a consortium, including Oracle, Silver Lake, and Andreessen Horowitz. They would control about 80 percent. Chinese shareholders would about 20 percent.

There would be a new app. Oracle would keep all American user data inside the U.S. and be able to monitor and stop suspicious activity. TikTok U.S. would have a majority American board with one member designated by the U.S. government, and the app's algorithm would be licensed from Chinese parent company ByteDance.

That has led critics concerned that TikTok is built with an internal sleight of hand…

Man:

How are you doing that?

Nick Schifrin:

… that the Chinese algorithm could allow Beijing to steal Americans' data and manipulate TikTok's content.

This week, the Republican chairman of the House Select Committee on the Chinese Communist Party, Michigan Republican John Moolenaar, wrote — quote — "I'm concerned the reported licensing deal may involve ongoing reliance by the new TikTok on a ByteDance algorithm and application that could allow continued CCP control or influence."

But it's not clear if there's even a final deal. Today, Xi Jinping released a statement that said — quote — "The Chinese government respects the wishes of the company and would be happy to see productive commercial negotiations."

Samm Sacks, Yale Law School:

The details are really going to matter to understand whether this addresses the national security concerns that U.S. policymakers have been so vocal about.

Nick Schifrin:

Samm Sacks is a senior fellow at Yale Law School and New America focused on Chinese technology.

Samm Sacks:

So just having the data housed in the U.S. by a U.S. company or consortium of companies doesn't exactly answer who has access to the data, under what conditions does it flow out of the U.S., same for the content. There are a lot of questions about who will be overseeing the recommendation algorithm, right? A license in and of itself doesn't tell us about how certain content will be promoted.

Nick Schifrin:

She says the Chinese government's stance on TikTok has become more flexible because Beijing sees a TikTok deal as a step toward making a larger deal with the U.S. on computer chips, trade or even about Taiwan.

Samm Sacks:

I don't think Beijing cares about TikTok, but I think they realized that they have a real opportunity here because Trump does. And they have bigger fish to fry. They may be using this as an opening to extract larger concessions.

Nick Schifrin:

President Trump also announced today that he would meet Xi Jinping at the Asia-Pacific Economic Cooperation Summit at the end of October and travel to China early next year, while Xi would reciprocate, William, with his own trip to the us.

William Brangham:

Nick, thank you.

We have also got our White House correspondent, Liz Landers, here joining us.

Nick, a question for you, though. There has been this bipartisan consensus that there really is a national security problem with TikTok. Has there been any evidence that the Chinese government has manipulated TikTok in some way?

Nick Schifrin:

So, ByteDance is a Chinese company and has to respond to any Chinese government request for data from ByteDance. And the Department of Justice alleged that the company actually accessed the devices of American journalists via their TikTok apps in the past.

As for the overall concern, William, as our story suggests, there are a few buckets. One is the concern that China could steal the data of Americans. And the deal, according to the people defending the deal, tell me that that's designed to be mitigated by the fact that the data of Americans is kept inside the us, firewalled off.

The second concern is that the app could somehow deliver malicious software. And the critics of the deal who I talked to today say that, yes, that still could happen because this company, this algorithm, will still be Chinese, and that even if you had some kind of review of the algorithm, it's simply too long and too complicated to know that an American company like Oracle can actually find anything nefarious inside the code.

And as an aside, William, all the experts I spoke to today told me that the legislation requires a complete divestiture from ByteDance, and this deal does not do that.

William Brangham:

Liz, President Trump's position on TikTok is, I think the technical term has evolved, you might say.

Liz Landers:

Yes.

William Brangham:

How and why has that happened?

Liz Landers:

Evolved, and it's been a 180, really.

Since he came back into office, he has totally changed his position on this. Back in August of 2020, he signed an executive order that would have effectively banned TikTok, and there was a ton of pushback to this. That was put at bay by some court orders. Congress took up the mantle on this issue in April of last year of 2024.

They passed bipartisan legislation that would ban TikTok here in the U.S. unless there was this divestiture. One of the very first things that President Trump did when he came into office on Inauguration Day on January 20 was to sign this executive order to postpone the shutdown of TikTok.

And he has attributed his change, his 180 in his position to how he saw TikTok help him in the election. He actually just said yesterday that Charlie Kirk urged him to get on the app. Listen to what he said.

Donald Trump:

I like TikTok. It helped get me elected. In fact, Charlie said, sir, you ought to get on TikTok. You would be great. I said, really? Tell me about TikTok. And we — as you know, we did unbelievably well with youth, like at a level that no Republican has ever even dreamt of.

Liz Landers:

And, William, just in the last few months that he has been in office now, he has delayed this TikTok ban over and over again. He signed the most recent executive order delaying this just a few days ago. That is now extended and in effect until December 16.

William Brangham:

Secondly, there's this consortium that Nick was reporting about that, if the deal goes forward, a consortium of American businesses would take this ownership of part of TikTok.

Who are they and how did they get put together?

Liz Landers:

So this group that could potentially be the buyer to have the majority American stake includes several people that President Trump is both close friends with and are donors to him and to the Republican Party, in particular, Larry Ellison — he's one of the co-founders of Oracle — and also Marc Andreessen, who's a venture capitalist.

For example, Marc Andreessen donated $2.5 million to President Trump's super PAC last year in 2024. So both of these men have close personal ties to President Trump, and they would also stand to gain a lot financially if this deal goes through.

William Brangham:

And then beyond the national security questions, there's also real political implications if this deal goes forward.

Liz Landers:

Yes.

Well, there are more than 170 million Americans who use TikTok, and that cuts across all kinds of ideologies and demographics, including young people. And so the president really believes that this helped him win the younger demographic. I think that Republicans want to continue to get young people involved in politics as well.

So he has now joined TikTok himself. He has more than 15 million followers on TikTok since he joined. So this would be a big deal if he was able to push through this deal with Xi and with China.

William Brangham:

Liz Landers, Nick Schifrin, thank you both so much.

Nick Schifrin:

Thank you.