How a “national security” ban became a 14 billion dollar payday for Trump’s allies
There’s been an update to the whole TikTok saga – so let’s talk about it.
You probably remember when TikTok was scheduled to be banned back in January. If you don’t use the app or you’ve been living under a rock, you might have missed the whole story. But what started as “national security concerns” turned into something much more revealing about how power actually works in America right now.
Here’s what happened:
Back in 2019, the U.S.-based music app Musical.ly was acquired by Chinese company ByteDance and eventually morphed into TikTok. I remember doing a truly terrible cover of Prince’s “Kiss” on Musical.ly, so yes, I was there.
Once a Chinese company owned it, alarm bells went off in Washington. Lawmakers started raising concerns about TikTok’s ties to the Chinese government and what that could mean for U.S. user data.
ByteDance, however, is a privately owned company. It was founded in 2012 by Chinese entrepreneur Zhang Yiming, who previously worked at companies like Microsoft. He’s now the richest person in China, worth nearly 50 billion dollars.
By the summer of 2020, Trump was ready to torch the app unless ByteDance sold TikTok to an American company. Microsoft, Oracle, and even Walmart all tried to get in on the deal.
In a rare moment of bipartisan harmony, Democrats and Republicans actually agreed on something. Both parties panicked over the idea that China might harvest American data or use TikTok to spread propaganda.
ByteDance didn’t sit on its hands. Before anyone forced them to, they spent 1.5 billion dollars on Project Texas, moving U.S. user data onto Oracle Cloud servers located on American soil. They created U.S. Data Security, staffed entirely by Americans with government security clearances, and built out full U.S.-based teams with offices across the country.
They even opened their algorithm to third-party audits, something most tech companies would rather set themselves on fire than do.
Then they started deleting U.S. data from their own servers before any law required it. ByteDance self-regulated and spent real money trying to prove they could be trusted, which is more than Meta or Google did before their privacy scandals exploded.
None of that impressed Congress.
In April 2024, lawmakers passed a bill known as PAFACA, giving ByteDance until January 19, 2025, to sell TikTok’s U.S. operations or face a ban.
TikTok sued, arguing the law violates the First Amendment. They lost their first appeal on December 6, 2024. The Supreme Court agreed to hear the case on January 10, 2025.
And then on January 17, 2025, in an unsigned opinion with no dissents, the Supreme Court upheld the ban. Done. Over.
TikTok actually went dark on January 18, the day before the deadline. For a few hours, 170 million American users couldn’t access the app. It looked like the end.
But then Trump, the same guy who tried to kill TikTok during his first presidency, rode in to “save” it. On his first day back in office, he signed an executive order keeping TikTok running while his administration negotiated a sale.
Here’s where it gets interesting.
Trump didn’t just want a sale. He wanted a cut.
In September 2025, Trump signed an executive order approving a “qualified divestiture” to a consortium of American investors. The deal is valued at around 14 billion dollars. And the Trump administration demanded a multibillion-dollar fee from the investors as a condition of closing. One source told NPR the request was “in the low billions” going straight to the U.S. Treasury.
The investors didn’t balk. Not a single one.
And who are these lucky winners? Larry Ellison’s Oracle, which will host all U.S. TikTok data and “retrain” the algorithm. Private equity giant Silver Lake. Venture capital firm Andreessen Horowitz. Abu Dhabi-based MGX. Michael Dell. And Rupert and Lachlan Murdoch, the controlling owners of Fox News, the New York Post, and the Wall Street Journal.
Notice anything about that list?
Oracle’s Larry Ellison is one of Trump’s closest allies in tech. He briefly became the richest person in the world during 2025. He hosted a Trump fundraiser at his Lanai estate. When Trump said publicly and privately that he wanted TikTok controlled by Oracle, Ellison was already waiting.
Andreessen Horowitz, the venture capital firm run by Marc Andreessen and Ben Horowitz, has been a major player in backing Peter Thiel’s network of companies. Andreessen wrote the “Techno-Optimist Manifesto” that reads like a Silicon Valley prosperity gospel. Both Andreessen and Horowitz endorsed Trump in 2024.
The Murdochs are the Murdochs. Their inclusion in the TikTok deal looks like a reward for friendly coverage and a hedge on every media bet possible.
This is what crony capitalism looks like in 2025.
The bipartisan law Congress passed was designed to force a clean break from ByteDance. Instead, ByteDance retains a 19.9% stake, still owns the underlying algorithm, and licenses it to the U.S. entity. A former Treasury official who worked on TikTok policy said the deal “looks more like a franchise arrangement that leaves TikTok’s core technology in China than a true divestment.”
The national security concerns that justified the whole ban? Still unresolved. The algorithm that Congress was so worried about China manipulating? Still owned by ByteDance. The only thing that changed is which American billionaires are now positioned to profit.
And about that multibillion-dollar “fee” – historians, economists, and industry insiders told NPR that squeezing businesses like this has very few parallels in modern history. Some called it extortion. The Trump administration also extracted a 10% equity stake from Intel after publicly calling for its CEO to resign. They demanded a slice of future profits from chipmakers Nvidia and AMD.
This isn’t security policy. It’s a shakedown.
Meanwhile, China does not need TikTok to access Americans’ data. Massive amounts of compromised data are already floating around online and for sale. If you think banning one app stops foreign intelligence agencies, I have some very bad news.
And the idea that banning TikTok will protect us from propaganda is laughable when Meta and X have been serving Russian propaganda like a breakfast buffet for years. We watched Russian trolls turn Facebook into their personal playground in 2016. X is crawling with foreign actors. Every time one network gets shut down, three more appear.
The hand-wringing over TikTok’s Chinese ownership would be more convincing if American tech companies hadn’t spent the last decade selling our data to anyone with a checkbook.
This whole saga was never about protecting Americans. It was about who gets to own the platforms that shape what 170 million people see every day. The answer, apparently, is whichever billionaires are loyal enough to Trump to pay the entry fee.
The deal is expected to close in January 2026. Creators lost months of income during the uncertainty. Small businesses lost customers. Communities that built their audience on TikTok had to scramble. But Larry Ellison, the Murdochs, and Andreessen Horowitz are doing just fine.
Security theater indeed. Like making people take off their shoes at the airport while the TSA misses most actual weapons. It makes everyone feel safer without actually making anyone safer. The only difference is who’s collecting the shoes.
SOURCES:
https://www.npr.org/2025/09/26/g-s1-90598/tiktok-deal-trump-oracle
https://www.npr.org/2025/12/18/nx-s1-5648844/tiktok-deal-oracle-trump
https://www.supremecourt.gov/opinions/24pdf/24-656_ca7d.pdf