Both US and Chinese officials are stating that an agreement has been reached for an American TikTok spin-off to be sold to American investors.
It’s not the first time the Trump administration has claimed that a deal has been agreed, but it is the first time that China is backing the claim, albeit in somewhat more muted terms …
Reuters reports:
U.S. and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to U.S.-controlled ownership that will be confirmed in a Friday call between U.S. President Donald Trump and Chinese President Xi Jinping.
China has said that the two sides have reached a “basic framework consensus.”
Once again, the revised September 17 deadline looks set to be extended to allow the deal to be finalized. That will be necessary because Congress will still need to approve the deal.
The Financial Times reports that the agreement includes licensing the all-important Chinese algorithm.
Wang Jingtao, deputy head of China’s powerful cyber security regulator, told reporters on Monday night that US and Chinese officials had agreed a framework that included “licensing the algorithm and other intellectual property rights”.
Since this is where the value lies, acquiring the app without the recommendation algorithm would have been a nonsense. Unlike other apps where users choose what to watch, TikTok just shows an infinite scrolling feed of videos it thinks you will like, quickly learning your tastes.
US Treasury secretary Scott Bessent separately told reporters that the spun-off app would be controlled by American investors but preserve some “Chinese characteristics”, according to Reuters. Another person familiar with the matter said TikTok had been developing a standalone US app in anticipation of a deal but was keen to ensure that content generated by American users would still be available to users in the “rest of the world” app and vice versa.
It’s still not clear who will end up owning the US app. The claimed deal back in March that ultimately failed to materialize involved several different US companies holding different percentages of the equity.
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