The Trump administration is reportedly poised to receive a $10bn payment from investors as part of a deal to establish a US-controlled version of TikTok, according to initial reporting from the Wall Street Journal. This $10bn sum, viewed by the US government as a transaction fee, will be paid by administration-friendly investors who assumed control of TikTok's US operations from its Chinese parent company, ByteDance.
Investors and Payment Structure
The investors involved in this arrangement for the popular social media app include software giant Oracle, MGX, an investment firm based in the United Arab Emirates, and private equity business Silver Lake. Along with other backers, these entities paid $2.5bn to the US treasury upon the deal's closure in January and are scheduled to make additional payments under this unusual setup until the total reaches $10bn.
Trump's Comments and Executive Order
President Donald Trump has previously emphasized the financial benefit, stating that the US will obtain a "tremendous fee-plus – I call it a fee-plus – just for making the deal and I don't want to throw that out the window." In September, Trump signed an executive order approving the deal, citing bipartisan concerns that TikTok's Chinese ownership presented a national security threat due to the platform's widespread popularity among Americans.
"It's owned by Americans, and very sophisticated Americans," Trump remarked during the order signing. "This is going to be American operated all the way."
Rarity and Scale of the Fee
A government imposing a transactional fee on a deal between private businesses is exceptionally rare. The $10bn amount appears significantly larger than the approximately 1% slice typically taken by investment bankers in similar circumstances. According to JD Vance, the US version of TikTok is valued at about $14bn, meaning the fee taken by the government is closer to 70% of the deal.
Operational Details and Broader Context
Under the agreement, TikTok will continue to operate fully in the US, although investors will be required to share profits with ByteDance. This transaction fee represents the latest in a series of unusual involvements by the Trump administration in the private sector, which includes taking stakes in companies such as Intel and USA Rare Earth, a firm that mines for critical minerals.
Additionally, Trump himself launched his own cryptocurrency coin while in the Oval Office, with investors in that venture recently offered "guaranteed direct access" to the president in exchange for $5m. Furthermore, on Saturday, the Atlantic reported that Trump's private telephone number is being sold to chief executive officers alongside crypto investors, and journalists are trading the number for those of other world leaders.
