4. The TikTok deal is just for show
The new deal to rescue TikTok from a threatened U.S. ban — full of provisions aimed at creating the temporary appearance of a presidential win — looks like a sort of Potemkin village agreement, Axios' Scott Rosenberg writes.
The big picture: TikTok's drama has unfolded as trade and security tensions between China and the U.S. deepen. The process has been driven by three demands from Trump.
1. ByteDance, TikTok's Chinese owner, must sell it to a U.S. company.
- After Microsoft's effort to acquire TikTok failed, Oracle emerged as the leading bidder. But the actual deal involves ByteDance handing TikTok over to a newly constituted U.S. company named TikTok Global.
- Oracle and Walmart will take 20% ownership of that company — valued, per many reports, at between $50 billion and $60 billion. The rest of it will be owned by ByteDance's existing shareholders, who include both Chinese and U.S. investors.
- It's still unclear exactly how TikTok Global will get to operate TikTok's coveted recommendation algorithm, or how its U.S. operation will be able to vet it.
2. The deal must secure American users' data. ByteDance, as a Chinese company, can't protect U.S. users' data from Chinese government spying, the firm's critics charge.
- Under the new deal, Oracle will take over all of TikTok's cloud operations in the U.S. market. Oracle has a close relationship with the White House, and Trump says he's confident in its security capabilities.
- A separate, U.S.-only board and security apparatus will oversee TikTok's U.S. operation to further placate U.S. concerns.
- Yes, but: TikTok's security threat remained hypothetical, not evidence-based, and it's unclear how different in practice the new arrangement will be from the old.
3. The deal must benefit the United States. In August, Trump insisted that the U.S. Treasury get a cut of the deal.
- It was never clear on what legal basis the president made this claim, which sounded like a shake-down to many observers.
- Oracle's deal announcement cites a promise by TikTok Global to add 25,000 new jobs to its U.S. workforce and says that would ultimately funnel $5 billion in new tax revenue to the U.S.
- Yes, but: The jobs could materialize, but the Trump administration has a long record of extracting promises of jobs that never arrive — as happened with a 2017 Foxconn factory deal in Wisconsin.
What's next: Between now and a Nov. 12 deadline, lawyers for all the parties will fill in the many blanks, seek to satisfy U.S. regulators' reviews, and try to make this deal fly. China, too, needs to bless the plan.
Meanwhile, TikTok users' consumption of short videos and memes will continue undisrupted till after the election.