The TikTok US joint venture deal is expected to generate nearly $10 billion in payments for the administration of US President Donald Trump, poured in from involved investors, according to a report by the The Wall Street Journal citing sources. WSJ said that this payment forms part of an arrangement through which investors considered friendly to the administration took control of TikTok’s US operations from ByteDance. The fee is separate from investments already made to establish the new entity responsible for running the app in the United States.Officials within the administration have defended the fee, saying it reflects Trump’s role in preserving TikTok’s operations in the United States and facilitating negotiations with China while addressing national security concerns raised by lawmakers.The agreement centres on the creation of a new entity, TikTok USDS Joint Venture LLC, established after TikTok’s Chinese parent company ByteDance finalised a deal in January to form a majority American-owned joint venture. The move was aimed at securing US user data and avoiding a potential ban on the short-video platform, which is used by more than 200 million people in the country. The joint venture is tasked with safeguarding US user data, applications and algorithms through data privacy and cybersecurity measures. However, only limited information has been publicly disclosed about the structure of the divestiture.Back in September last year, US Vice President JD Vance said that the newly created US company would be valued at around $14 billion.Among the investors involved are Oracle, Silver Lake and Abu Dhabi-based MGX, along with other backers. These investors reportedly paid about $2.5 billion to the US treasury department when the deal was finalised and are expected to make additional payments over time until the total amount reaches $10 billion.The deal has also drawn legal challenges. Earlier this month, Trump and US Attorney General Pam Bondi were sued by retail investors linked to two social media competitors of TikTok who are seeking to overturn the president’s approval of the arrangement with ByteDance.According to a report by Reuters, the lawsuit argues that the US government’s approval of the agreement did not comply with requirements set out in a 2024 law governing the platform. The case was filed in the US Court of Appeals for the District of Columbia by the Public Integrity Project on behalf of two retail investors in rival social media companies.The plaintiffs contend that the administration’s approval of the TikTok arrangement was unlawful and are seeking to renegotiate the deal.In 2024, the US Congress passed legislation requiring ByteDance to sell its US assets by January 2025 or face a ban or potentially hundreds of billions of dollars in fines. However, Trump did not enforce the law, and Bondi later said companies would not face liability for continuing to allow TikTok to operate.ByteDance has said that the new entity, which was finalised in January and is 80% owned by non-Chinese investors, would protect US user data, apps and algorithms through strengthened privacy and cybersecurity measures. The company, however, disclosed only limited details about the financial structure of the transaction.
