Trump to pocket $10B fee for TikTok deal in US
What's the story
The Donald Trump administration is set to collect a whopping $10 billion fee for brokering the recent deal that gave control of TikTok's US business to a group of investors. The information was reported by Wall Street Journal and New York Times. The fee is said to be coming from new investors like Oracle and Silver Lake, among others.
Fee distribution
Fee will be paid in installments
The $10 billion fee will be paid in installments, with an initial payment of $2.5 billion already made to the Treasury at the time of deal closure on January 22. The deal saw a group of investors take a majority stake in TikTok for $14 billion. If the reports are accurate, this fee would account for over 70% of the total deal value.
Business interventions
Trump's past interventions in business deals
This isn't the first time the Trump administration has intervened in private business deals. The administration had previously taken a 10% stake in Intel last August, a "golden share" in US Steel, and a 20% cut on chip sales from NVIDIA to China. This particular agreement also involves Larry Ellison, co-founder and CTO of Oracle and one of Trump's biggest supporters and fundraisers.
Operational transition
ByteDance finalizes majority US-owned joint venture
In January, ByteDance finalized a deal to form a majority US-owned joint venture, TikTok USDS Joint Venture LLC. The new firm will secure US user data, apps, and algorithms through data privacy and cybersecurity measures.
Justification
Administration officials defend fee amid criticism
Administration officials have defended the fee, saying it is justified given Trump's role in saving TikTok's US operations and negotiating with China to finalize the deal, while addressing lawmakers' national security concerns. Earlier this month, Trump and US Attorney General Pam Bondi were sued by retail investors in two of TikTok's social media rivals. The investors are seeking to reverse Trump's approval of ByteDance's deal to form a majority American-owned joint venture.