Within the technology product trading market of the United States of America, a complex transaction process surrounding the ownership and operation methods of short video applications is moving forward. Behind this transaction is a comprehensive and thoughtful decision based on a large amount of funds, data security, and geopolitical factors.
Deal structure and valuation disagreements
At present, there are reports that a consortium composed of Oracle and other non-Chinese investors is planning to acquire the application’s business in the United States. Its parent company, ByteDance, expects to retain only a minority stake after the deal is concluded. What this implies is that the operating entity of the application in the United States will undergo a fundamental change, transforming from a subsidiary of a Chinese company into an independent entity dominated by American capital.
There are clear differences among market analysts on the core of this deal, that is, the value of the U.S. business. CFRA gave a valuation of between US$40 billion and US$50 billion, mainly relying on its large user base and considerable advertising revenue. However, Bloomberg Industry Research believes that the valuation is only US$30 billion to US$35 billion, and it is also clearly stated that this figure covers the discount caused by the "forced sale".
Data security and new application solutions
U.S. regulators have always been most concerned about the possibility of user data being transferred to China, and that content recommendation algorithms may be influenced by foreign governments. In order to respond to these doubts, launching a new version of the application that can comply with US compliance regulations is regarded as a key measure to resolve the dispute.
It is expected that the new version of the application will adopt a new data governance framework. According to the previous agreement with Oracle, Oracle, as a "trusted technology provider", has the right to conduct security inspections of source code in the United States. The purpose of this arrangement is to ensure the transparency and controllability of data flow and algorithm logic from a technical perspective.
A long process of review and resistance
The main body of the review of this application is the US government, which started in 2019. Just in November of that year, the Committee on Foreign Investment in the United States launched a national security review of ByteDance’s acquisition of Musical.ly. The focus of the review was the processing of user data. This review has kicked off a legal and political game that will last for several years.
In August 2020, then-President Trump signed an executive order requiring ByteDance to divest its business in the United States within 90 days. Although the ban was not immediately enforceable due to legal challenges, pressure persisted. In June 2021, although the Biden administration revoked its predecessor's executive order, it initiated a more systematic legislative process to impose restrictions.
Legislative Advances and Deadlines
In April 2024, the U.S. Congress passed a piece of legislation called the "Protecting the United States from Foreign Adversary Control of Applications Act," which was later signed into effect by President Biden. The bill clearly required ByteDance to divest its U.S. business on the grounds of national security, which must be completed within a specified time, otherwise it would face a nationwide ban.
In January 2025, the initial divestiture deadline stipulated in the bill arrived. Although ByteDance and its US subsidiary launched a legal appeal, in December 2024, the federal appeals court rejected the appeal and upheld the original injunction, which once faced the risk of stopping on January 19, 2025.
Deadline extension and new version launch plan
As the political situation changed, the fate of the application took a turn for the better. After the new President Trump took office on January 20, 2025, he extended the divestiture deadline three times. The latest deadline was set on September 17, 2025. This extension left time for the final completion of the transaction and the transition of the new and old applications.
According to the current arrangement, around September 17, a new version of the application, operated by a new consortium and in compliance with US legal requirements, is expected to be officially launched. At the same time, existing app versions will be removed from the Apple App Store and Google Play Store in the United States. The user's data will be migrated to the new entity.
Doubts about legal compliance of transactions
Although this transaction is intended to allow the app to operate legally in the United States, there is still uncertainty about whether it will fully meet the requirements of the relevant laws. Some U.S. lawmakers and national security experts are cautious about this, and their doubts mainly focus on two aspects.
First, there is the issue of control of the core algorithm. Reports indicate that ByteDance has doubts about whether it is willing to share the recommendation algorithm technology that has made it successful with new U.S. buyers. Secondly, even if ByteDance only retains a minority stake, whether its potential influence can be completely isolated is also the focus of continued review by regulatory agencies.
From your point of view, when it is handed over to a capital consortium from the United States to take over and operate it, can the "national security risks" claimed by American legislators be effectively reduced? Or is it more of a commercial compromise reached in the nature of a geopolitical game? Welcome to share your opinions in the comment area. If you think the information provided in this article is detailed, please also like it to support it.
