The new US company will be valued about $US14 billion ($A21 billion), Vice-President JD Vance said, putting a price tag on the popular short video app far below some analyst estimates.
Trump on Thursday delayed until January 20 enforcement of the law that bans the app unless its Chinese owners sell it amid efforts to extract TikTok's US assets from the global platform, line up American and other investors, and win approval from the Chinese government.
The executive order shows Trump is making progress on the sale of TikTok's US assets, but numerous details need to be fleshed out, including how the US entity would use TikTok's most important asset, its recommendation algorithm.
"There was some resistance on the Chinese side, but the fundamental thing that we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure that we protected Americans' data privacy as required by law," Vance told reporters at an Oval Office briefing on Thursday.
Trump's order says the algorithm will be retrained and monitored by the US company's security partners, and operation of the algorithm will be under the control of the new joint venture.
Trump said Chinese President Xi Jinping had indicated approval of the plans.
"I spoke with President Xi," Trump said. "We had a good talk, I told him what we were doing and he said go ahead with it."
China's foreign ministry said on Friday it hoped "the US will provide an open, fair and non-discriminatory business environment for Chinese companies investing in the United States".
Trump has credited TikTok, which has 170 million US users, with helping him win re-election in 2024.
"This is going to be American-operated all the way," Trump said.
He said Michael Dell, the founder, chairman and CEO of Dell Technologies; Rupert Murdoch, the chairman emeritus of Fox News owner Fox Corp and newspaper publisher News Corp, and "probably four or five absolutely world-class investors" would be part of the deal.
The White House did not discuss how it came up with the $US14 billion valuation.
TikTok's Chinese parent, ByteDance, values itself at more than $US330 billion, according to its new employee share buyback plan.
According to Wedbush Securities analyst Dan Ives, TikTok was estimated to be worth $US30 billion to $US40 billion without the algorithm as of April 2025.
Chinese media on Friday painted a different picture of the TikTok agreement, suggesting ByteDance would continue to play a major or operational role.
ByteDance will set up a new US company as part of the restructuring of TikTok's US operations, Chinese media outlet LatePost reported.
The new company would be responsible for e-commerce, branding operations and interconnection with international operations, the report said.
The report also said the joint venture would be responsible for US digital security, safeguarding content and software as well as related local businesses.
A group of three investors, including Oracle and private-equity firm Silver Lake, will take a roughly 50 per cent stake in TikTok US, while a group of existing shareholders in ByteDance will hold a roughly 30 per cent stake.
Republican House of Representatives lawmakers said they wanted to see more details of the deal to ensure it represented a clean break with China.
"As the details are finalised, we must ensure this deal protects American users from the influence and surveillance of CCP-aligned groups," said US Representatives Brett Guthrie, Gus Bilirakis and Richard Hudson.
with AP
