On September 25, President Donald Trump signed an executive order aimed at allowing TikTok to maintain its operations in the United States while addressing national security concerns. Following a conversation with Chinese leader Xi Jinping on September 19, Trump announced that a consortium of U.S. investors, led by Oracle, would take control of 80 percent of TikTok’s U.S. operations. However, as more details emerge, significant questions surrounding the deal’s effectiveness and implications arise.
One of the central issues remains the unresolved national security concerns that prompted Congress to consider banning TikTok in the first place. The platform’s algorithm, often referred to as its “secret sauce,” which determines user content and may serve as a tool for Chinese influence, will continue to be owned by ByteDance, TikTok’s parent company. The deal stipulates that a licensed version of the algorithm will be provided to the U.S. investor group, which is expected to retrain it using data from American users.
This arrangement raises critical concerns. What will happen when ByteDance updates its algorithm? Will the U.S. version remain in sync with the original, or will it fall behind? Instead of severing ties with China, this deal effectively allows significant Chinese influence to persist.
Financially, the Trump administration stands to benefit handsomely from the transaction, with estimates suggesting billions in fees. Trump has characterized this arrangement as a “tremendous fee-plus,” indicating his administration’s intention to capitalize on the deal without fully addressing the underlying security risks.
Moreover, control of TikTok appears to be shifting to a select group of Trump’s political allies, raising alarms about crony capitalism. Figures like Larry Ellison and Rupert Murdoch are reportedly involved in the investor group, leading critics to question the transparency and fairness of the process. “The TikTok deal doesn’t look open to all market participants,” noted Rush Doshi, a former national security official under President Joe Biden, pointing out that it seems to favor those already close to the administration.
This unsettling development invites a broader inquiry: Is the U.S. president retreating from the tech war against China? Trump initially sparked this conflict in 2018 by placing Chinese tech giant ZTE on a trade blacklist, a move that many national security experts lauded as necessary to confront China’s growing power.
In his second term, however, Trump’s approach has shifted dramatically. Upon taking office in January, the U.S. tech war against China was intensifying, with the Biden administration implementing rigorous export controls to limit China’s access to advanced semiconductor technology. These measures were designed to maintain a competitive edge in the tech sector and prevent Beijing from acquiring capabilities that could enhance its military or cyber operations.
Biden’s strategy was characterized by a commitment to preserving U.S. leadership in technology through an array of export controls, collaboration with allies, and domestic support for chip production. Just before Trump’s inauguration, Biden also unveiled an AI diffusion rule aimed at keeping sensitive technology within the U.S. and its allies.
Contrary to expectations that he would maintain a hardline stance against China, Trump has focused more on imposing tariffs on other nations, such as Canada and Mexico, rather than prioritizing the counterbalance against China. His administration’s personnel choices reflect this shift, as key advisors like AI czar David Sacks and senior science advisor Michael Kratsios advocate for expanding into foreign markets rather than tightening export controls.
In a striking turn of events, Trump has also shown a willingness to reverse previous restrictions on technology sales to China. Following a lobbying effort by Nvidia CEO Jensen Huang, Trump allowed sales of critical AI chips to China, albeit with a stipulation of revenue sharing with the U.S. government. “I said ‘I want 20 percent if I’m going to approve this for you,’” Trump remarked, highlighting the intertwining of national security and personal profit motives.
As Trump prioritizes economic interests over national security, questions about the integrity of U.S. policy in the tech realm continue to mount. His administration’s recent diplomatic engagements in the Middle East, including lucrative AI deals, underscore a pattern of prioritizing profit over strategic concerns. Critics worry that this could enable Chinese companies to access vital computing resources, further complicating the geopolitical landscape.
The direction of the U.S. tech war remains uncertain, with the Trump administration signaling an inclination to negotiate terms with China rather than confront its strategic ambitions. Amidst this backdrop, Trump appears increasingly focused on a potential visit to Beijing, suggesting that he may be willing to make concessions that could undermine the long-standing objective of deterring Chinese expansionism.
The evolving situation leaves observers questioning Trump’s commitment to addressing China’s influence and whether the U.S. will continue to uphold its position in the global tech arena. As the President prepares for high-stakes negotiations with Xi, the implications of his recent actions on both national security and international relations will be critical to monitor in the coming months.
