How a “national security” ban became a 14 billion dollar deal 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 2017, Chinese company ByteDance bought the lip-sync app Musical.ly and folded it into TikTok the next year. 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 - though since 2021 a Chinese state fund has held a 1% “golden share” and a board seat in its main Chinese subsidiary. It was founded in 2012 by Chinese entrepreneur Zhang Yiming, who previously worked at companies like Microsoft. In March 2025, Forbes named him the richest person in China, and he’s worth nearly 70 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. After Trump’s 2020 orders, and while they negotiated with federal regulators, they launched Project Texas - a plan TikTok said would cost 1.5 billion dollars - moving U.S. user data onto Oracle Cloud servers located on American soil. They created U.S. Data Security, open only to U.S. citizens and green card holders, with the government able to run its own background checks on hires, 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 said they’d delete U.S. data from their own servers - long 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 in December and heard arguments 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 according to The Wall Street Journal and NPR, the Trump administration asked the investors for a multibillion-dollar fee on top of the deal. One source told NPR the request was “in the low billions” going straight to the U.S. Treasury.
According to that source, 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. In 2020, he opened his Rancho Mirage, California estate for a Trump fundraiser. 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 bankrolled many of the same defense-tech startups as Peter Thiel’s network. Andreessen wrote the “Techno-Optimist Manifesto” that reads like a Silicon Valley prosperity gospel. Both Andreessen and Horowitz came out for Trump in July 2024 - though Horowitz later said he’d also give to groups backing Harris.
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 deal 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
https://www.axios.com/2025/12/18/tiktok-sale
https://en.wikipedia.org/wiki/TikTok,_Inc._v._Garland
Correction, September 28th, 2026: This essay first said ByteDance bought Musical.ly, a U.S.-based app, in 2019 - it bought the Shanghai-based app in 2017 and folded it into TikTok in 2018. It said ByteDance spent 1.5 billion dollars on Project Texas before anyone forced it to, with a staff of Americans holding government security clearances - Project Texas came after Trump’s 2020 orders, TikTok said it would cost 1.5 billion dollars, and the staff had to be U.S. citizens or green card holders the government could run its own background checks on. It said Larry Ellison hosted a Trump fundraiser at his Lanai estate - the 2020 fundraiser was at his Rancho Mirage estate, and he wasn’t there. It said Zhang Yiming is China’s richest person, worth nearly 50 billion dollars - he was worth about 69 billion when this posted, and Forbes’s November 2025 list ranked bottled-water billionaire Zhong Shanshan first. It said the Supreme Court agreed to hear the case on January 10th, 2025 - that’s when it heard arguments. And it misquoted a former Treasury official, who called it a “franchise deal,” not a “franchise arrangement.”
Update, September 28th, 2026: A few lines now say who says so - The Wall Street Journal and a source who talked to NPR on the fee, and TikTok itself on deleting U.S. data - and others now say the 14 billion dollars is what the deal values TikTok U.S. at, a Chinese state fund has held a 1% “golden share” in ByteDance’s main Chinese subsidiary since 2021, Andreessen Horowitz backs many of the same defense startups as Peter Thiel’s network, and Ben Horowitz also said he’d give to groups backing Harris; and when the deal closed on January 22nd, 2026, after this posted, Andreessen Horowitz and the Murdochs weren’t on the final investor list.