President Trump now says Xi Jinping has “approved” a TikTok deal; the White House has again extended TikTok’s sell-or-ban deadline to December 16 while negotiators float a structure that keeps the app operating in the U.S. with ongoing Chinese ties. Beijing, notably, hasn’t confirmed the details. If this holds, it’s not a compromise. It’s a negotiated surrender.
Let us stop pretending this fight is about culture or free speech. It’s about power, data, and money. TikTok is not even permitted to operate in China; Douyin is the domestic version. Yet America’s capital markets and advertising budgets have kept TikTok dominant with U.S. teens and young adults. Our nonprofit, Future Union, showed last year that U.S. public pensions have roughly $8.1 billion committed to funds with ByteDance exposure and university endowments count $1.0 billion, all overlooking the risks in favor of single-minded, tremendous financial returns (e.g. Future Union, TikTok: The Tip of America’s Investment Conundrum, May 2024). The Robert Wood Johnson, MacArthur and Mellon foundations are poised to benefit. In short, the retirement accounts of U.S. teachers and firefighters are helping finance the Chinese Communist Party’s most effective propaganda tool. Details are still emerging yet should the administration continue in a negotiated hybrid structure permitting continued Chinese control, such a decision directly contravenes all Congressional legislative intent and broad judicial consensus from the highest court.
The Supreme Court Ruled Divest—or Shutter
In April 2024, Congress passed—and President Biden signed—the divest-or-ban law targeting foreign-adversary-controlled apps. In January 2025, the Supreme Court upheld the law’s constitutionality. The message was clear: if ByteDance can’t fully divest TikTok (up to a 20% ownership max), it can’t operate here. As details emerge, today’s “deal talk” does the opposite; it keeps ByteDance in the loop with significant influence. If the endgame is a structure with continuing Chinese ownership or a licensed algorithm, it is hard to square with the statute the Supreme Court just affirmed. It’s also geopolitical theater: we’re signaling that enough pressure, donors, and ad dollars can bend a national-security judgment.
Beijing’s Existing “Golden Share” Problem
ByteDance isn’t a normal counterparty. The People’s Republic of China (PRC) holds a so-called “golden share” and a board seat in a key ByteDance subsidiary, embedding state leverage by design. Any arrangement that preserves ongoing Chinese ownership, licensing, or algorithmic control means Washington is outsourcing American information security to a CCP-supervised structure. That would flunk the spirit—and likely the letter—of the law. And while there are various promulgations of partial solution, the “Project Texas” proposal, which proposes a structure in which U.S. company, Oracle, would host all U.S. data in the U.S., together with compliance firewalls, etc. as a solution to this problem. It is not. Independent analyses and congressional reviews have long noted that data localization and monitoring will not negate influence or code-control risks—especially when updates to the recommendation engine, model weights, or moderation rules can be pushed from abroad.
Industrial Scale Influence
The algorithm is the weapon. Letting a Beijing-tethered entity curate what 170 million Americans see is not a privacy risk—it’s a torrential propaganda vector and a gift inviting a continued pervasive data theft. After October 7, multiple studies and reports documented that pro-Palestinian narratives dramatically out-performed pro-Israel content on TikTok, and Israeli leaders publicly confronted TikTok over manipulation and hostile bot activity. You need not agree with any side to grasp the strategic vulnerability: an adversary-aligned platform can nudge a generation’s worldview in real time.
Wall Street’s Singular Interest
This march to a “deal” isn’t driven by national security; it’s driven by incentives. ByteDance’s revenue hit roughly $120 billion in 2023 with profits near $40 billion, overtaking Tencent by some measures. Powerful U.S. investors—late-stage crossover funds, growth PE, and venture names—are deep in the capitalization table or hedged through China’s growth. A negotiated extension preserves valuation, protects marks, and keeps the IPO/M&A optionality alive. National security risk is simply being priced as “acceptable.”
Outsized Risks of the Current Negotiations
If the administration moves forward permitting a hybrid ownership structure that maintains China’s involvement, the cloud over ByteDance’s Chinese owners dissipates thereby restoring the respectability of working for a company that is justifiably in disrepute. This makes hiring the best engineering and other talent far more likely, especially with unequivocal war chest of revenue and profit generated by its current popularity targeting the most desirable audience, teenagers and young adults. It also restores ByteDance’s critical ability to conduct mergers and acquisitions of desirable new technologies to extend and enhance the existing algorithm, removing the presumptive threat of rejection and permitting ByteDance, or its successor, to engage the playbook that has kept all nearly all large technology monopolies relevant, from Meta (formerly Facebook) purchasing Instagram, WhatsApp to Alphabet (Google) purchasing YouTube, DoubleClick, and DeepMind Technologies to Microsoft purchasing Linkedin, Github and the OpenAI partnership, respectively, effectively supplementing or replacing leaders even as the original flagship products, like Facebook in social media, have waned.
Finally, do not be surprised when TikTok’s successor entity announces a venture capital arm (expect the eponymous, “TikTok Ventures”) to seed new technologies and startups, plying money for access, a legacy strategy used by the various Chinese venture capital investors to gain access, influence, and ultimately either extract critical intellectual property and know-how from startups and other desirable technology companies that culminates in the Chinese Communist Party gaining access to inject such gains back into their national technology champions.
The Results of this Negotiated “Deal”
- Restore legitimacy: The stigma that kept top U.S. engineers away fades; recruiting gets easier; lobbying soars.
- Reopen the M&A spigot: With political risk “solved,” TikTok can buy growth and entrench—just as rivals might have caught up if capital access stayed constrained.
- Institutionalize leakage risk: Even with U.S. hosting, sustained code, model, or policy influence from ByteDance means American intellectual property, behavioral data, and civic discourse stay downstream of a Communist legal regime that compels cooperation.
Clear Transparency of the Results
This is not a “pragmatic” resolution. It is regulatory arbitrage for a foreign-influence platform. The cost isn’t abstract:
- Information integrity: A state-tethered recommender system is a standing cognitive operations tool.
- Industrial policy: We are rewarding the most successful Chinese consumer-tech export of the century, while U.S. rivals were on the cusp of filling the void a real divestment would have created.
- Capital discipline: Allowing U.S. pensions, endowments, and foundations to finance adversary-controlled tech teaches every boardroom the same lesson: national security is negotiable.
Courage, Anyone?
There is one single solution: Courage. Congress should hold the line it already drew: full divestment of code, control, and capital—not licensing, not “clean rooms,” not U.S. data hosted by a friendly brand. And America’s financial fiduciaries should treat the PRC-controlled tech as ineligible—just as sanctions bar other adversary exposures—for further investment or M&A.
Additionally, with dozens of U.S. senators and governors harboring 2028 interests, this issue is a prime moment for a signature counterpoint for Democratic aspirants as well as a laudable opportunity for Republicans to stand firm.
Anything short of a clean break is capitulation dressed up as compliance. And the algorithm will remember who surrendered.
Andrew King is GP at Bastille Ventures, investing in critical technology furthering national security, and founder of the bipartisan nonprofit, Future Union, working with the private sector to combat state espionage, and advises Congress, the Select Committee on China, Dept. of Treasury, Dept. of Commerce, and White House. Formerly, he was the general counsel of the Dallas Stars NHL team and corporate lawyer, hedge fund investor, and investment banker.
