The Trump administration is poised to receive roughly $10 billion in payments from investors involved in the recently completed transaction to take control of TikTok’s U.S. operations, delivering an unusual financial windfall tied to the government’s role in keeping the popular social-media platform active in the United States.
The payments are part of the arrangement under which a consortium of admin-aligned investors took control of TikTok’s American business from its Chinese parent company, ByteDance, according to the Wall Street Journal, citing people familiar with the matter. The payments are separate from the capital investors committed to establish a new entity that now operates the platform in the U.S.
Backers of the deal include cloud-computing firm Oracle, private-equity company Silver Lake and Abu Dhabi investor MGX. Those investors and others have already paid the U.S. Treasury about $2.5 billion when the transaction closed in January and are expected to make additional payments until the total reaches about $10 billion, the people said.
President Trump had previously signaled the government expected compensation for facilitating the arrangement. When outlining the framework for the deal in September, he said the United States would receive a “tremendous fee-plus” for its role in allowing the transaction to proceed.
“It hasn’t been fully negotiated, but we’ll get something,” Trump said at the time, arguing that the government’s involvement in securing the agreement justified compensation.
The $10 billion payment would be nearly unprecedented for a government helping arrange a transaction, historians have said. Vice President JD Vance previously said the new TikTok entity running the U.S. operations is valued at about $14 billion in the deal, which some tech analysts have said dramatically undervalues the company.
As part of the agreement, the U.S. entity has to share profits with ByteDance, which licensed its popular algorithm to the new venture so it could be fully trained on Americans and still owns nearly 20%. -WSJ
Under the terms of the arrangement, ByteDance licensed TikTok’s recommendation algorithm to the new American venture, allowing the platform to continue operating with its core technology. ByteDance retains nearly a 20% ownership stake and will receive a share of the new entity’s profits.
Administration officials have defended the fee, saying it reflects Trump’s role in preserving TikTok’s U.S. operations while negotiating with China and addressing national-security concerns raised by lawmakers.
The transaction stems from legislation requiring TikTok’s U.S. business to reduce ByteDance’s ownership or face a shutdown. Lawmakers from both parties had expressed concern that Chinese control of the platform could expose sensitive data on millions of American users.
The TikTok arrangement is part of a broader pattern in which the administration has sought financial stakes or compensation in dealings involving major corporations. The government has taken a nearly 10% stake in Intel and negotiated an agreement to receive a share of chip sales to China from Nvidia in exchange for export licenses.
The administration has also secured influence over the operations of U.S. Steel through a “golden share” agreement tied to its takeover by Japan’s Nippon Steel.
Together, the moves signal a more direct government role in major corporate transactions – one that, in the case of TikTok, could result in one of the largest payments ever associated with a government-facilitated deal.
