ByteDance to Hold 1 of 7 Board Seats in TikTok US: White House Official
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China’s ByteDance will hold one of seven board seats and less than 20 percent of stock in TikTok US under a new deal, according to a White House official.
The official said on Sept. 21 that Americans with national security and cybersecurity credentials will hold the other six seats. The United States will also control the code and algorithm, the official said.
“TikTok’s content-recommendation algorithm will be retrained from the ground up—reviewed and analyzed under U.S. supervision with U.S. data that will not be shared outside of the United States,” the official said.
A law was enacted last year that required ByteDance to divest itself of TikTok or cease operations in the United States, based on national security concerns. President Donald Trump has extended that deadline several times, including again last week, as he seeks to strike a deal for the app that he says helped him win the votes of millions of young Americans.
“I had a great call with President Xi, and as you know, we approved the TikTok deal,” he told reporters. “We have some great investors, some of the biggest in the world. American investors, great people. And we look forward to getting that deal closed.”
Leavitt said the “deal is done” and only needs to be signed.
“This deal does put America first; let me just be very clear, TikTok will be majority owned by Americans in the United States,” she said.
Leavitt said six of the seven board seats will be held by Americans and “the data and privacy will be led by one of America’s greatest tech companies, Oracle.”
“The algorithm will be controlled by Americans as well,” she said. “All of those details have already be agreed upon.”
She added that she believes the deal will be signed “in the coming days.”
A Chinese readout of the call between Trump and Xi did not refer to a deal nor any terms of a potential deal, instead stating that the Chinese regime would allow enterprises to conduct “commercial negotiations based on market rules and reach solutions that comply with Chinese laws and regulations and balance interests.”
The United States began scrutinizing TikTok and ByteDance in 2018 over national security concerns, and as officials floated potential divestment, the Chinese regime in 2020 passed a law that would give the regime control over foreign sales of recommendation algorithms like the one used by TikTok.
ByteDance has said in court documents that a divest-or-ban law is effectively a “ban” because Chinese authorities would not allow for a sale.
That Chinese law created hurdles as Trump signed an executive order requiring the divestment of TikTok in the last year of his first term, which was stayed by a court.
From November 2020 through August 2022, Justice Department and cybersecurity officials met with ByteDance and TikTok for months in search of a solution short of divestment, and Oracle had played a major role in ByteDance’s proposal then as well.
The U.S.-based cloud company was meant to store all data belonging to Americans on American soil, as well as give it code review responsibilities in TikTok and ByteDance’s activities.
U.S. lawmakers have said they want to review the TikTok deal to make sure it is in line with the national security law they passed.
“The devil will be in the details,” Rep. Frank Pallone (D-N.J.) said.
