U.S. and China Reach Framework Deal on TikTok Ownership: What We Know

We are pleased to detail the recent developments between the United States and China, as a framework deal has been announced for the restructuring of TikTok’s ownership—across U.S. operations—to address national security and legal concerns.

  • The agreement was reached in Madrid during high-level trade and diplomatic discussions.

  • Under this framework, U.S. control (or majority American ownership) will be established over TikTok’s U.S. operations, moving away from full control by ByteDance, its Chinese parent.

  • A call between U.S. President Donald Trump and Chinese President Xi Jinping has been scheduled for formal confirmation of the deal.

  • The U.S. administration has extended the enforcement deadline for the law banning TikTok unless ownership changes, to December 16, 2025, to allow time for the agreement to be finalized.

Ownership, Data & Control: What the Deal Proposes

Ownership Structure

  • A new U.S.-based entity will be created to run TikTok’s U.S. operations. American investors (including Oracle, Silver Lake, and Andreessen Horowitz) are reported to hold a majority (around 80%) stake.

  • ByteDance is expected to retain a minority share.

Data Handling & Security

  • U.S. user data is likely to be stored and managed in the U.S., e.g. through Oracle’s Texas data facilities.

  • There will be oversight and safeguards to ensure data security and that Chinese government access is restricted or eliminated. The precise mechanisms are still under negotiation.

Algorithm, Intellectual Property & “Chinese Characteristics”

  • The algorithmic and IP questions are among the trickiest. While Americans want full control, China seems to want to retain certain licensing or export rights, especially around algorithmic technology.

  • “Chinese characteristics” of the app—meaning some features deemed integral or culturally tied to ByteDance—may remain under China’s influence via licensing or legal arrangements.

Legal & Political Background: Why This Deal Was Needed

The U.S. Ban Law and National Security Concerns

  • In 2024, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA). Under this law, TikTok would be banned unless ByteDance divested its U.S. operations or lost control.

  • The law’s effective date was January 19, 2025. But enforcement has been delayed multiple times while negotiations took place.

Trade & Diplomacy

  • The TikTok issue has become part of broader U.S.-China trade negotiations and tensions, including tariffs, export controls, and intellectual property policies.

  • China has emphasized that any agreement must respect its export control laws and regulations regarding technology and licensing.