TLDR
- Investors who acquire TikTok’s US operations will pay the Trump administration nearly $10 billion
- Major investors include Oracle, Silver Lake and Abu Dhabi’s MGX fund
- An initial payment of $2.5 billion has been transferred to the Treasury, and additional installments are planned
- US-based TikTok is valued at around $14 billion, although experts debate whether that’s true.
- The deal follows legislation requiring ByteDance to divest its stake in TikTok’s US business.
The Trump administration has negotiated a deal that would allow TikTok to continue operating across the United States. Under the terms of the deal, investors who took control of TikTok’s US operations agreed to pay the federal government about $10 billion.
This significant fee comes in addition to the capital required to establish a new entity within the country that owns the popular social media platform. Key investors such as Oracle, Silver Lake and Abu Dhabi’s MGX transferred about $2.5 billion to US Treasuries after the deal closed in January. Additional payments are planned until the full $10 billion is met.
ByteDance, TikTok’s parent company in China, completed the transaction in January. The agreement created a joint venture with American majority ownership called TikTok USDS ($1.00 · Live) Joint Venture LLC. The newly formed agency will monitor US user data, mobile apps and proprietary algorithms.
ByteDance will retain about 20% ownership in the restructuring and has licensed its algorithmic technology to the venture. The American organization must also share profits with ByteDance.
Vice President JD Vance stated that a rebranded US company, TikTok, is worth about $14 billion. Tech industry analysts have questioned the figure, suggesting it significantly understates the company’s true value.
How the fees compare to typical transactions
According to business historians, the $10 billion state tax is an almost unprecedented scheme for a government to promote private sector transactions. For this future, investment banking fees on standard deals are usually less than 1% of the total transaction value. Bank of America expects to collect about $130 million for its advisory services on its $71.5 billion acquisition of Norfolk Southern, one of the largest single bank payments.
Administration representatives will defend the payment structure if necessary. They highlight Trump’s critical role in protecting TikTok’s presence in the US and navigating complex negotiations with Chinese authorities while meeting national security demands from Congress.
The transaction was mandated by a law passed during the first term of Trump’s presidency. The law forced ByteDance to significantly reduce its ownership position in TikTok’s US operations or face a complete shutdown. Congressional leaders have expressed serious concerns about a Chinese-owned corporation that has access to the personal data of more than 200 million Americans.
Earlier this month, Trump and Attorney General Pam Bondi were sued by retail shareholders of rival social media platforms. Those investors are trying to block government approval of the ByteDance joint venture deal.
A broader example of government stakes in private companies
The TikTok deal represents one element of a larger trend. The Trump administration has similarly secured about 10% of Intel’s ownership. It negotiated to receive a portion of chip sales to China from Nvidia as consideration for granting export permits. The administration also acquired equity positions in additional corporations and retained a “golden stake” in US Steel after purchasing Nippon Steel.
The Wall Street Journal initially revealed the $10 billion figure on March 13, 2026.
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