TikTok’s Chinese parent company, ByteDance Ltd., is expected to receive about half of the profits from the platform’s U.S. operations even after selling majority ownership to American investors, according to people familiar with the matter, as reported by Bloomberg.
The arrangement reportedly involves ByteDance earning a licensing fee on all revenue generated from providing its algorithm to the new U.S. operating entity, along with a share of profits proportional to its equity stake. Overall, the Beijing-based company is likely to retain 50% or more of total profits from the U.S. operation after the transaction, the sources said.
ByteDance, TikTok, and the White House did not respond to requests for comment.
The profit-sharing deal adds another layer to a long-running corporate saga spanning multiple U.S. administrations. President Joe Biden signed legislation requiring ByteDance to relinquish control of TikTok’s U.S. operations to American ownership or face a potential shutdown. Former President Donald Trump has repeatedly pushed back deadlines for the sale, negotiating compromises to keep the platform running, citing its influence during his 2024 election campaign.
Last week, Trump reportedly spoke by phone with China’s Xi Jinping regarding the deal, with the U.S. side stating that an agreement had been reached. Chinese authorities have not confirmed the consensus, and the terms of the transaction remain unsettled. Vice President J.D. Vance added to the uncertainty, suggesting the sale price could be around $14 billion—well below analysts’ prior estimates of $35 billion to $40 billion.
