The long-running saga of TikTok in the U.S. has taken a new turn. And it involves a massive and highly unusual payment. The most surprising detail to emerge from the potential deal is a new claim from President Donald Trump that the U.S. government is set to collect a “tremendous fee” for negotiating the takeover of TikTok’s American operations. This payment could reportedly amount to billions of dollars, a remarkable arrangement for a business transaction.
A government multibillion-dollar fee is at the center of the TikTok deal
According to The Wall Street Journal, the fee will come directly from the group of American investors set to acquire a majority stake in TikTok’s U.S. business. The White House has confirmed that this group will likely include tech giants and private equity firms like Oracle, Silver Lake, and potentially Fox Corporation. If you’re not aware, Rupert and Lachlan Murdoch run the latter.
The fee is the price of admission to a deal that aims to resolve national security concerns over the popular app. The arrangement would allow TikTok to continue operating in the U.S. under a new structure, with Americans controlling six of the seven board seats. Crucially, the app’s powerful algorithm would also be married and controlled in the U.S. by Oracle. This addresses a major sticking point in negotiations. The current owner, ByteDance, would retain a minority stake of less than 20%. This key concession was necessary to make the entire deal possible.
A move to stay in the good graces of the U.S. government
For the American investors, paying a multibillion-dollar fee to the government is a calculated move. It shows they are willing to pay a premium for a deal that grants them control over one of the most popular social media apps in the world while also satisfying the U.S. government’s demands. Trump has stated that the investors are American “patriots” who “love this [United States] country.”
China’s government still needs to give its formal approval to the deal. However, US President Trump claims that China has already given the go-ahead and there are only formalities pending.
