The deal, confirmed by officials on Tuesday, will see TikTok’s U.S. assets transferred to American ownership, easing long-standing concerns about security, tied to its Chinese parent company, ByteDance.

President Donald Trump, addressing reporters at the White House, said: “We have a deal on TikTok … We have a group of very big companies that want to buy it.” 

He made this statement just a day before the September 17 deadline that could have forced the app, used by 170 million Americans, to shut down. Hours later, the administration extended the deadline until December 16, buying ByteDance 90 more days to finalise the handover.

Under the structure taking shape, ByteDance will hold no more than 19.9% of the new U.S. entity, a level carefully set below the 20% regulatory threshold. The remaining 80% will rest with a consortium of investors that includes Susquehanna International Group (SIG), KKR, General Atlantic, Silver Lake, and new entrants like Andreessen Horowitz. Oracle is also expected to retain its cloud services role with TikTok.

The deal between TikTok and the United States (US) aligns with a model previously applied to the Nippon Steel, U.S. Steel agreement, which allowed Washington to insert a government-appointed board member into the American company.

Sources familiar with the matter say the new TikTok board will also be U.S.-dominated, with one seat designated by the federal government.

Treasury Secretary Scott Bessent told CNBC: “This deal wouldn’t be done without proper safeguards for U.S. national security. It seems as though we were also able to meet the Chinese interest.” He added that the commercial terms had largely been settled since March, but tariff disputes stalled Beijing’s approval.

Yet, some questions are still unresolved. ByteDance’s most prized asset, the recommendation algorithm, may remain under its control through a licensing arrangement, as China’s 2020 export laws classify such technology as sensitive intellectual property. 

Critics in Washington warn that leaving ByteDance with control of the algorithm could still allow Beijing indirect influence over U.S. users, sabotaging the purpose of the 2024 divestiture law passed under the Biden administration.

However, Trump has shown little appetite to enforce an immediate ban. His administration has extended the divestiture deadline four times, noting the risk of alienating TikTok’s massive user base and disrupting political engagement on the platform. Trump himself has 15 million followers on TikTok and has openly acknowledged the app’s role in his re-election bid.

A final confirmation of the framework is expected after a call between Trump and Chinese President Xi Jinping later this week. CNBC reports the agreement could close within 30 to 45 days if no last-minute changes emerge.

China’s state media has described the outcome as a “win-win,” emphasising mutual respect and cooperation. But on Capitol Hill, some lawmakers argue that repeated extensions affect the intent of the divestiture law. Others insist that a measured approach prevents unnecessary disruption for millions of Americans who rely on the app daily.

For now, TikTok remains online in the U.S., shielded by a fragile compromise shaped as much by politics as by national security.

The agreement emerged after two days of intense negotiations in Madrid. U.S. Treasury Secretary Scott Bessent said the looming September 17 deadline, which could have forced TikTok to halt operations in the U.S., pushed China to consider a deal. 

“They’re interested in Chinese characteristics of the app, which they think are soft power. We don’t care about Chinese characteristics. We care about national security,” Bessent told reporters.

This is the fourth round of high-stakes talks in four months aimed at resolving a string of trade disputes alongside the social media divestiture. Delegations, led by Bessent and Chinese Vice Premier He Lifeng, have met in multiple European cities since May, navigating a tense trade environment defined by tariff escalations and the halting of rare earth exports to the U.S.

U.S. Trade Representative Jamieson Greer described the TikTok agreement as a demonstration of good faith. “It’s no secret that there are serious issues on trade, economics, and national security between the United States and China. To be able to come, sit down, quickly identify the issues, narrow them down to a very granular spot, and be able to come to a conclusion, subject to the leaders’ approval, I mean, that is remarkable,” Greer said.

Bessent acknowledged that China made what he called “very aggressive asks” in trade and technology concessions in exchange for the divestiture. He stressed that national security would not be compromised for a social media platform.

The talks coincided with Washington urging allies to impose tariffs on Chinese imports over Beijing’s purchase of Russian oil, which China denounced as coercion. 

Separately, Beijing announced a preliminary probe into U.S. chipmaker Nvidia for alleged anti-competitive practices, widely interpreted as retaliation for U.S. restrictions on China’s semiconductor sector. Bessent called the timing “poor.”

TikTok’s parent company, ByteDance, has been under pressure since January, when the app faced a potential U.S. ban under the Protecting Americans from Foreign Adversary Controlled Applications Act. 

Trump extended the divestiture deadline multiple times. It’s not yet known if this latest announcement will satisfy the law or whether Congress will weigh in.

Trump took to Truth Social to signal optimism about the outcome. “A deal was also reached on a ‘certain’ company that young people in our Country very much wanted to save. They will be very happy! I will be speaking to President Xi on Friday. The relationship remains a very strong one!!!”

Negotiators from both sides stopped short of disclosing whether ByteDance would transfer control of TikTok’s underlying technology. Chinese officials indicated that the deal could include licensing intellectual property, including the app’s algorithm, to a U.S. entity.

The Madrid talks are a critical juncture for U.S.-China relations. While TikTok dominates social media culture, the discussions are embedded within concerns over national security, trade, and technology access. 

Speaking aboard Air Force One on Sunday, Trump stressed the overwhelming interest in acquiring the platform. “We have a lot of potential buyers. There’s tremendous interest in TikTok,” he told reporters. “I’d like to see TikTok remain alive.”

ByteDance, under pressure from Washington, must offload the app or risk being shut out of the U.S. market. Lawmakers argue that the company’s Chinese ties are a national security threat, with concerns over data privacy and potential influence operations by Beijing.

A number of U.S. investors have surfaced as interested parties. Blackstone, one of the world’s largest private equity firms, is exploring a minority stake in TikTok’s U.S. business, sources familiar with the matter told Reuters. 

The firm is reportedly considering joining Susquehanna International Group and General Atlantic, two of ByteDance’s existing non-Chinese stakeholders, in injecting fresh capital to secure the deal.

Vice President JD Vance is confident that an agreement will take shape before the deadline. Meanwhile, Trump himself has implied a possible extension if negotiations require more time. 

However, China’s role in the process is still a wildcard. The former president acknowledged that Beijing would need to sign off on the sale, adding, “Maybe I’ll give them a little reduction in tariffs or something to get it done.”

Before the current TikTok ban reports in the U.S., bipartisan lawmakers pushed through legislation requiring ByteDance to divest its American business by January 19, 2024, but legal and political delays bought the company additional time. 

Fast forward to the recent case, with the April 5 deadline, Trump is betting on a resolution. “There’ll be a deal with TikTok, I’m pretty certain,” he said.