Popular social media app TikTok has secured another lifeline in the United States after years of regulatory battles and high-level talks between the US and China. The development follows a deal reached between them in Madrid last month. The deal follows US lawmakers’ concerns over national security and privacy implications of the app’s ties to its Chinese parent company, ByteDance.

A complex restructuring that transfers the app’s majority control to the US is now underway, with investors including technology company Oracle, investment firm Silver Lake, and Abu Dhabi’s MGX according to media reports. President Donald Trump’s executive order certifies the agreement as a “qualified divestiture,” legalising the social media platform again by removing it from foreign adversary control.

Under the new US-China framework agreement, TikTok’s US data operations will be restructured to strengthen oversight while preserving ByteDance’s core ownership and intellectual property rights. The app’s Texas-based US Data Security (USDS) will become a US joint venture with external investors holding the majority control. ByteDance remains the single largest shareholder and retains full ownership of its algorithm and other intellectual property, licensing them to USDS for use.

China’s Cyberspace Administration and Ministry of Commerce confirmed, “Algorithm licensing will comply with Chinese export-control laws, ensuring a balance of national and corporate interests.” The new arrangement effectively formalises the app’s existing model while addressing US security concerns through localised data management. This US transfer is a significant shift in the company’s operations and an on-paper win for President Trump’s White House, according to Chatham House. “But the optics mask a harsher truth,” it says.

Analysts note the arrangement reflects a strategic compromise and underscores the emerging model of ‘controlled globalisation’, where political imperatives, not market logic, increasingly shape cross-border technology ownership and regulation.

While Washington has stepped back from insisting on an outright ban and giving a reprieve to TikTok in the US, Beijing underscores that the outcome respects corporate autonomy and market principles. The finer details tell a different story. This so-called ‘kept but controlled’ arrangement exposes Washington’s actual objective — not the protection of ‘data security’ as officially claimed, but the containment of the Chinese platform’s growing influence in the global information ecosystem.

Chinese journalist Deng Yuwen argues that Washington’s push to forcibly acquire TikTok is not primarily about safeguarding data security. He asserts that the true goal is to sever America’s enduring dominance over global discourse. Beneath the rhetoric of national security lies a deeper anxiety about the shifting balance of international public opinion.

If data security were truly Washington’s overriding concern, note analysts, its approach would have been straightforward: either hand the app’s US operations entirely over to an American company or remove the app from US platforms altogether.

If TikTok genuinely posed a national security threat, the company should not be permitted to continue using Chinese-developed algorithms.

The social media company had already placed US user data under Oracle’s custody, with any access requiring Oracle’s explicit approval. This meant ByteDance could not retrieve the data without Oracle’s permission. If the sole concern were to prevent data access to the Chinese government, this arrangement should have been sufficient.

Analysts argue that Washington fears the app’s communicative power. Unlike Facebook or X (formerly Twitter), which depend on social networks to spread content, TikTok’s algorithm delivers personalised short videos that cut across linguistic and cultural boundaries at remarkable speed.

Consequently, TikTok has become a dominant channel through which American youth consume entertainment and news. Surveys indicate that roughly one-third of young Americans now rely primarily on TikTok for current affairs, a trend that erodes the longstanding dominance of US media and platforms over domestic and global information flows.

This shift is worrying for Washington. For decades, the US has dominated global narratives through Hollywood, Silicon Valley platforms, and mainstream media. A Chinese app becoming the most popular platform among young people punctures America’s longstanding narrative hegemony.

During the Gaza conflict, for instance, lawmakers accused the platform of amplifying footage of Israeli military actions and fuelling anti-Israel sentiment among American youths and college students. That episode directly accelerated congressional momentum behind the ‘sell or ban’ law.

In Huawei’s case, Washington applied a strict sell-or-ban approach, arguing that 5G networks constituted critical infrastructure with any potential backdoor risk being unacceptable. TikTok is, however, not being treated as a hard security threat. Instead, the new arrangement, under which the app is allowed to operate under US-managed operations, licensed algorithms and strict compliance oversight, is, at its core, a defensive ideological manoeuvre. The aim is not to erase TikTok’s presence but to neutralise its capacity to amplify China’s global influence.

Published in Dawn, The Business and Finance Weekly, October 13th, 2025