US President Donald Trump has signed an executive order to pass a proposed deal to transfer the US operations of TikTok to American control, preventing the app’s ban in the US, after months of false starts and negotiations with the Chinese government and TikTok’s owner, Bytedance.
In the executive order, signed on Thursday, 25 September, the president declared that the terms of the new deal meet the security concerns laid out by a bipartisan bill that was originally signed into law by former President Joe Biden in April 2024, which gave Bytedance a year to sell TikTok or face a US ban. President Trump has extended the enforcement deadline four times this year, while the US and China neared a deal. Today, he extended the deadline for another 120 days, to allow time for the new deal to be signed off by China and passed by US regulators.
Although the final details of the deal are still being ironed out, White House officials have confirmed that once the deal is in place, a consortium of US-based investors will own up to 80 per cent of TikTok and hold six of seven board seats, leaving its original owner, Bytedance, with around 20 per cent and the ability to choose one board member. The US administration won’t hold a stake or be part of the board for TikTok, which has over 170 million US users.
Who sits on the consortium is yet to be confirmed, but a White House official said on Monday that the US-based software giant Oracle will oversee the privacy and data protection of the new US entity and will carry out an audit of TikTok’s algorithm. At the signing of the executive order on Thursday, President Trump said that Oracle CEO Larry Ellison is part of the ownership group and that his company is “playing a very big part” in the deal. Some reports suggest that Oracle will license a copy of TikTok’s algorithm to train on US user data. Other rumoured shareholders that have been reported include the venture capital firm Andreessen Horowitz, private equity firm Silver Lake, asset manager Blackstone, Walmart and billionaire Frank McCourt. In an interview on Fox News TV on Sunday, President Trump also said that media tycoon Rupert Murdoch (who is Australian but has American citizenship) and his son Lachlan (the CEO of Fox News owner Fox Corporation) could be part of the deal, alongside Michael Dell, CEO of Dell.
Who will ultimately control TikTok’s prized algorithm in the US has not yet been confirmed. It’s this algorithm, which sits at the core of the “For You” feed app experience, which has been the source of the US government’s security concerns over the potential for the Chinese government to access app users’ data and potentially manipulate what they see to political ends.
At the signing, President Trump said of TikTok’s new ownership: “It’s owned by Americans, and very sophisticated Americans. This is going to be American-operated all the way.”
Changes to the algorithm
The deal that’s been reached has rescued creators, brands and advertisers from what they feared a few months ago: the total shutdown of TikTok in the world’s biggest consumer market.
With this deal, US users won’t need to migrate to a new version of the app, something that would have forced brands to navigate an additional buying platform and potentially hurt buying efficiency. It’s expected that US brands and creators will still be able to reach international audiences, and vice versa.
But a lot of uncertainty remains around what the proposed new owners’ potential control over the app’s core algorithm will look like, and how this may impact the user experience.
In the short term, experts say that brands could seize the opportunity to stress TikTok’s new US safeguards as part of their brand safety messaging. In the longer term, they say that brands will have to wait to see what type of app environment evolves. “Over time, if the US version develops its own culture and tone, positioning may need to be more localised, with campaigns tailored to that specific environment,” says Dante Donati, assistant professor of marketing at Columbia Business School.
“It should still be effective at presenting content that aligns with users’ interests and behaviours, but without influence from non-US content, there could be a significant shift,” Thomas Walters, chief innovation officer and co-founder of creator-first social agency Billion Dollar Boy.
Critics point to the biggest danger with a more localised algorithm being that US users of the app will encounter even less diversity of thought.
“It will turn into a tightly closed hyper-echo chamber with little international and alternative content to be seen, and practically leave no room for new and different content to even surface,” says Amir Kaltak, CEO and co-founder of alternative social media app Own. “It could limit users’ ability to express themselves in never-seen ways,” he adds.
Where any changes in the algorithm are still unclear and will likely take a while to play out, in the short term, most experts say that Oracle’s role could mean more controls.
“It’s difficult to predict, but it will likely mean data stored in the US, regular audits, and stricter access rules,” says Donati. “For users, this will mostly be invisible. For brands, the key question is whether these changes make people feel more comfortable using TikTok.”
More localised marketing strategies
This could mean more separation of trends across markets, which means brands and advertisers may have to split their marketing strategies across geographies, becoming more localised to meet consumer trends.
“While many TikTok trends currently cross borders, which is something we leverage for agility marketing strategies, it may become more crucial to track local trends to resonate with different audiences,” Walters says.
Walters’s agency is currently recommending that brands work with local creators in the region they’re targeting, to hedge against the “For You” page losing its current global leaning. And for trend-driven or agility marketing, he recommends that brands choose trends that transcend borders when targeting international audiences, once the deal is implemented later this year.
Agility is key
While TikTok negotiations have repeatedly been extended over the last few months, creators and brands have had time to de-risk by experimenting more with other platforms. Where TikTok once pioneered the short-form reel format, competitor social platforms like Instagram and Youtube have released Reels and Shorts, which has given them an alternative platform to house the same kind of content.
Donati predicts some hedging to Reels and Shorts among creators and brands is likely until after the deal is implemented and we have more certainty about what the new US oversight translates to in terms of the “For You” feed. But he points to the advertising industry’s existing agility: in a recent PNAS study, he found that when TikTok went down for just one day in January, advertisers quickly shifted their ad spend to Meta, raising Meta ad prices by 12 per cent.
Analysts say that it’s too early to tell whether the increased US oversight will cause a consumer exodus from the platform in the US, but wherever users spend their time, brands and advertisers will follow. But experts recommend that brands stay flexible in the short term, since Meta and YouTube could see price shifts if advertisers move budgets temporarily.
“A good safeguard is to design creative that works across TikTok, Reels, and Shorts so campaigns can be adjusted easily,” Donati says.
Meanwhile, creators themselves are used to changing tack quickly. “Change is nothing new in the creator economy,” says Amber Venz Box, president and co-founder of creator commerce platform LTK. “Algorithms and platform preferences are constantly changing, and this is something that creators are used to managing. Creators and brands will continue to see what works and adapt as they always do.”
More certainty to work with
Box also points to the disillusionment felt among social media users towards what fills their feeds — a general distrust for social media algorithms, and the proliferation of AI-generated content could be a boon for creators who have managed to build a following that will follow them from one platform to another.
“The silver lining is that trust in creators is rising,” Box says. “According to our recent LTK x Northwestern study, in the last year, trust in creators is up more than 20 per cent. Real people with real influence are more valuable than ever.”
As for creators themselves, once the initial threat of an outright ban subsided, the industry seemed less fazed by the developments in the TikTok negotiations over time.
“I have a US audience, so this will impact me, but as of yet, I’m not too worried,” says Chiara King, a UK influencer with over a million followers on Instagram and 4.1 million on TikTok. “I’m just glad that TikTok isn’t completely going away. As far as I’m aware, brands don’t seem to be changing their strategy, and no one in my community seems too stressed about it — I think it’s more of a ‘we will cross that bridge when we come to it’ type approach with brands and creators,” King adds.
As much still hangs in the balance, the industry is relieved a deal has finally been reached. “The bottom line is that TikTok’s future in the US appears safer than it was just a few months ago,” Walters concludes.
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