March 13 (Reuters) – President Donald Trump’s administration will receive a fee of about $10 billion from investors in the recently closed deal “to take control of TikTok’s U.S. business,” the Wall Street Journal reported on Friday, citing people familiar with the matter.
TikTok’s Chinese owner ByteDance in January finalized a deal to establish a majority-U.S.-owned joint venture that will protect U.S. data, to avoid a U.S. ban on the short-video app used by more than 200 million Americans.
TikTok USDS Joint Venture LLC will protect US users’ data, applications and algorithms through data privacy and cybersecurity measures. He revealed few details about the divestment.
Vice President JD Vance had said in September that the new American company would be valued at about $14 billion.
The payment is part of the deal in which management-friendly investors gained control of TikTok’s U.S. operations from ByteDance, WSJ said. ​It adds to investments already made to establish a ‌new entity to operate the app in the US.
Investors Oracle, Silver Lake, Abu Dhabi’s MGX and other backers paid about $2.5 billion to the Treasury Department when the deal closed and will make a series of subsequent payments until the total reaches $10 billion, according to the Journal.
TikTok and the White House did not immediately respond to Reuters requests for comment.
Administration officials have said the tariff is justified, citing Trump’s role in rescuing TikTok’s U.S. operations and guiding negotiations with China to complete “the deal while addressing lawmakers’ national security concerns,” according to the WSJ.
Earlier this month, Trump and US Attorney General Pam Bondi were sued by retail investors in two rival TikTok social networks, who sought to reverse the ‌US policy. the president’s approval of a deal by the company’s Chinese owner, ByteDance, to form a majority-U.S.-owned joint venture.
(Reporting by Juby Babu ​in Mexico City; Editing by Arun Koyyur)