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Donald Trump signed an executive order on Thursday outlining the terms of a deal to transfer TikTok to a US owner.

Trump said he and China’s president Xi Jinping had come to an agreement to allow TikTok to continue operating in the US, separating the social media platform from its Chinese owner ByteDance. Trump said the deal complies with a law that would have forced the shutdown of the app for American users had it not been divested and sold to a US owner.

“I spoke with President Xi and he said, ‘Go ahead with it,’” Trump said at a press conference. “This is going to be American-operated all the way.”

Under the plan, US investors will take over the majority of TikTok’s operations and take charge of a licensed copy of the app’s powerful recommendation algorithm. American companies are expected to own about 65% of the US version of the spun-off company, while ByteDance and Chinese investors will own less than 20%. The new version of TikTok will be controlled by a seven-member board of directors made up of cybersecurity and national security experts, six of them Americans, according to the White House.

The new US company will be valued at $14bn, according to JD Vance, who also spoke at the press conference, a number far lower than the valuation for ByteDance overall, which is estimated to be around $330bn. By comparison, Meta, which owns Facebook and Instagram, is valued at $1.8tn.

The group of American TikTok investors is led by the US software giant Oracle, which will oversee TikTok’s US operations, provide cloud service for user data storage and get a license to take control of the app’s algorithm. White House officials have said ByteDance and Chinese officials will not have access to US user data.

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