Two days before a deadline for TikTok to be sold to a non-Chinese company or otherwise face a ban in the United States, a deal has not yet been cemented but the contours of one are starting to take shape.
Vice President JD Vance said on Thursday that the administration would announce a plan for TikTok by Saturday. A federal law passed last year to resolve national security concerns related to TikTok and its Chinese owner, ByteDance, called for the app to be sold or banned in January. President Trump delayed the enforcement of that law until April 5.
Mr. Trump also met with top officials at the White House on Wednesday to consider a proposal for TikTok’s future.
While TikTok has enjoyed interest from potential buyers including Amazon, the Trump administration is eyeing a deal that would sidestep a sale of the entire company, according to four people familiar with the negotiations, who spoke on the condition of anonymity. The plan would be to spin out TikTok into a new company and bring on new American investors to reduce the ownership stakes of Chinese investors.
The private-equity giant Blackstone and the venture capital firm Andreessen Horowitz are considering investments, they said. Two of the people suggested the private equity firm Silver Lake was also considering an investment. Current investors, like Susquehanna and General Atlantic, would retain a stake in TikTok, and Oracle, which processes and serves TikTok user data, would likely maintain at least an operational role in managing TikTok’s data, three of the people said.
The down-to-the-wire negotiations are nothing new for TikTok, which has repeatedly wriggled out of earlier scrutiny in the United States. The app has cemented its role as a cultural juggernaut in the country, where it has more than 170 million users.
TikTok and Silver Lake didn’t respond to a request for comment. Andreessen Horowitz declined to comment.
A White House spokesperson said any announcement on TikTok would come from Mr. Trump and declined to comment on the details.
Many aspects of the deal under consideration remain murky. It’s not clear what will happen to TikTok’s coveted algorithm. Two people suggested that the new entity could license the algorithm from ByteDance. Under the law, a new TikTok entity cannot cooperate with ByteDance “with respect to the operation of a content recommendation algorithm” or for data sharing.
“Congress said that for national security purposes, there has to be an operational severing between China, this new entity and the algorithm,” said Jim Secreto, a former counselor for investment security at the Treasury Department, who helped shape the Biden administration’s policy on TikTok.
TikTok, which spent most of the last year trying and failing to defeat the law in courts, has maintained that it is not for sale, in part because the Chinese government would block a transaction. Mr. Trump suggested last week that he might relax upcoming tariffs on China in exchange for the country’s support of a deal. The Chinese government’s latest stance on TikTok is unclear.
Questions over the deal’s legal uncertainty have prompted some of the firms interested in investing in TikTok to look for indemnification for their investments, one of the people said.
Congress, which passed the TikTok law in a rare bipartisan vote, may not support the deal Mr. Trump is eyeing.
Senator Josh Hawley, Republican of Missouri, said on Wednesday that he was skeptical of a deal that kept control of the app’s video recommendation algorithm inside China.
“If you can get a deal to actually sell the company and it meets the terms that the statute sets out, that’s fantastic; that’s great,” he said. “But if not, then I think you’ve got to enforce the statute and ban TikTok. This middle way, I don’t think is viable.”
David McCabe and Theodore Schleifer contributed reporting from Washington.
