HONG KONG, Sept 29 (Reuters Breakingviews) – Being used as a geopolitical pawn is never a good thing but Chinese social media giant, ByteDance, has avoided the worst outcome. Five years since U.S. President Donald Trump ordered the Chinese group led by Liang Rubo to sell the American operations of its TikTok app or face a ban on national security grounds, a deal that will keep the short-video app operational in the world’s largest economy appears to have the blessing of both Beijing and Washington.
TikTok, regularly used by a fifth, opens new tab of U.S. adults to consume news, will be split into two units, Reuters reported last week, citing sources. One will be wholly-owned by the Chinese firm and operate the app’s businesses such as e-commerce and advertising. The other will be a joint venture between ByteDance, which will hold a 20% stake, and investors led by software developer Oracle (ORCL.N), opens new tab and buyout shop Silver Lake which will handle data security as well as license and manage the parent’s prized algorithm.
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If a final deal holds along those lines, it would be a positive outcome for ByteDance. U.S. officials including now Secretary of State Marco Rubio, had earlier argued for a full transfer, opens new tab of the TikTok algorithm to American owners. And until Trump launched his latest tariff war, Beijing signalled, opens new tab it would not allow a forced sale, raising the prospect that ByteDance would be left empty-handed.
That the privately-held company now looks set to receive lucrative licensing and other fees that could amount to roughly 50% of TikTok’s U.S. profit, per Bloomberg, opens new tab citing sources, suggests ByteDance will retain significant economic value of its business which Bernstein analysts reckon may generate up to $25 billion in revenue this year.
Drawing a line under the years-long saga will free up Liang to double down on China. The company he co-founded is known in its home market as an app-factory but is now pouring its energy into building foundational artificial intelligence tools. ByteDance’s models are competitive with those from Alibaba (9988.HK), opens new tab, DeepSeek and overseas peers; its video and image generation tools are also gaining popularity globally. The company recently launched an employee share buyback valuing itself at more than $330 billion, up from the $315 billion just six months ago, as its first-quarter sales surpassed Meta Platforms’ (META.O), opens new tab.
ByteDance was not in a position to dictate terms of the TikTok deal and the app’s long-term fortunes in the U.S. may still depend on the Sino-American relationship. But, for now, Liang has a reason to celebrate.
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Editing by Una Galani; Production by Aditya Srivastav
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Robyn Mak joined Reuters Breakingviews in 2013. Previously, she was a Research Associate for the Global Policy Programs at the Asia Society in New York. She has also worked at the Carnegie Endowment for International Peace in Washington DC and interned at several consulting firms, including the Albright Stonebridge Group. She holds a masters degree in international economics and international relations from the Johns Hopkins School of Advanced International Studies and is a magna cum laude graduate of New York University.
