US Reach "Framework" Deal For TikTok With China
A deal has been reached to allow TikTok to continue its operations in the United States, according to a "framework" agreement between Washington and Beijing. The deal, which aims to resolve national security concerns, was set in talks in Madrid and is expected to be "complete" after a Friday phone call between President Donald Trump and Chinese President Xi Jinping. U.S. officials stated that the talks had "gone very well," with the new arrangement granting U.S.-controlled ownership to the popular social media platform.
The ownership structure of the new entity is expected to include a consortium of new investors, alongside existing investors from TikTok's parent company, ByteDance. Sources told CNBC's David Faber that Oracle is among the firms involved and will maintain its cloud deal with the platform. Faber said that "Where this thing is capitalized and how large it is remains to be seen," adding, "I’m hearing it’s actually going to be relatively small in terms of the actual size of the checks that are written for the entity itself, and it will not be something that is going to go public at some point.”
This new development follows months of uncertainty and multiple deadline extensions for ByteDance to divest its U.S. operations. The original deadline, set by a 2024 law passed by Congress, was put in place due to fears that the Chinese government could access sensitive American user data. U.S. Treasury Secretary Scott Bessent said the looming September 17th deadline helped encourage Chinese negotiators to reach a potential deal, though it could still be extended by 90 days. The resolution of the TikTok issue is also seen as a key component of broader U.S.-China trade negotiations.
Despite the "framework" agreement, some experts remain skeptical, pointing to the lack of clarity on crucial details. It is still unknown who will control TikTok's powerful recommendation algorithm, and whether the data of its 170 million U.S. users will be fully stored and encrypted domestically. According to one former national security official, the data TikTok collects today "could help train the models that power China's military and intelligence capabilities tomorrow." These core vulnerabilities, experts suggest, may remain untouched until further specifics are released.
