Exceptionally rare ‘fee’ to be paid by investors who took control of US operations from Chinese parent company

Donald Trump’s administration is reportedly poised to be paid $10bn by investors as part of a deal to create a US-controlled version of TikTok.

The $10bn, considered by the US government as a sort of transaction fee, will be paid by the administration-friendly investors who took control of TikTok’s US operations from its Chinese parent company, ByteDance, according to reporting that first appeared in the Wall Street Journal.

The investors in the popular social media app include software company Oracle; MGX, an investment firm based in the United Arab Emirates; and private equity business Silver Lake. These entities, along with other backers, paid $2.5bn to the US treasury when the deal closed in January and are set to make further payments in the unusual arrangement until the total hits $10bn.

Trump has previously said that the US will get a “tremendous fee-plus – I call it a fee-plus – just for making the deal and I don’t want to throw that out the window”. The president signed an executive order in September approving the deal, amid bipartisan concerns that TikTok’s Chinese ownership posed a national security threat given the platform’s popularity among Americans.

“It’s owned by Americans, and very sophisticated Americans,” Trump said at the signing of the order. “This is going to be American operated all the way.”

A government taking a transactional fee for a deal between private businesses is exceptionally rare and the $10bn amount appears much larger than the roughly 1% slice that investment bankers take in such circumstances. JD Vance has said the US version of TikTok is valued at about $14bn, meaning the fee taken by the government is closer to 70% of the deal.