Case Study: Anatomy of a Geopolitical Compromise

Background

The TikTok saga represents one of the most complex technology-geopolitics intersections of the 2020s. What began in 2020 as a national security concern evolved into a six-year regulatory battle spanning two US administrations, multiple court challenges, and ultimately required direct intervention from both American and Chinese leaders to resolve.

The core issue centered on whether Beijing could access personal data of over 200 million American users or influence the app’s content recommendation systems. The app had become deeply embedded in American culture, particularly among younger users who relied on it for entertainment, news, and in many cases, their livelihoods.

The Crisis Point

By late 2024, the situation reached a breaking point. The Biden administration had passed the Protecting Americans from Foreign Adversary Controlled Applications Act, effectively mandating ByteDance divest TikTok or face a US ban. ByteDance faced an impossible choice: lose access to its most lucrative market or surrender control of its prized asset.

Meanwhile, US-China relations had deteriorated significantly. A bruising tariff war was damaging both economies, and TikTok became symbolic of broader technological decoupling concerns. Beijing had designated TikTok’s personalized recommendation algorithms as export-restricted technology in August 2020, making any traditional sale legally complicated from the Chinese side.

The Turning Point: October 2025 Summit

The Trump-Xi summit in South Korea in October 2025 marked a fundamental shift. Both leaders faced domestic pressures to stabilize the economic relationship. The summit produced a one-year trade truce, halting the tariff escalation and creating space for diplomatic solutions to thorny issues like TikTok.

Trump’s political calculus had also evolved. Where he had previously sought to ban TikTok in his first term, he now credited the platform with mobilizing young voters in his successful 2024 reelection campaign. This created a powerful incentive to find a solution rather than shut down the app.

The Framework Agreement: September 2025

During talks in Madrid in September 2025, negotiators from both countries developed a “framework agreement” for TikTok to continue operating through restructured ownership. This framework allowed both sides to save face: the US could claim it had addressed national security through majority American ownership, while China could argue it prevented a forced sale and maintained some stake in the venture.

The Final Deal: January 2026

The announced structure reflects careful calibration to satisfy multiple stakeholders. The new US entity is managed by three investors: Oracle (cloud computing and database software), Silver Lake Management (private equity), and MGX (Abu Dhabi sovereign wealth). ByteDance retains exactly 19.9% ownership, just under the 20% legal threshold.

Key technical arrangements include the new entity licensing TikTok’s algorithm from ByteDance but retraining it exclusively on US user data, with Oracle overseeing data storage. The entity has authority over content moderation, and Singaporean CEO Chew Shou Zi remains on the oversight board.

Critical Analysis

What Worked:

• High-level political intervention broke the deadlock that lawyers and regulators couldn’t resolve
• The structure allowed both sides to claim victory domestically
• Timing capitalized on improved bilateral climate from the trade truce
• Creative ownership structure met legal requirements while preserving some ByteDance involvement

Unresolved Questions:

• Operational relationships between the new entity and ByteDance remain unclear
• Oracle’s own history with data breaches raises security questions
• Whether the algorithm licensing arrangement truly severs Beijing’s potential influence
• How US lawmakers will scrutinize the deal’s implementation

Strategic Implications: The deal reveals that TikTok was ultimately treated by Beijing as expendable leverage, a “low-hanging fruit” that could be sacrificed to preserve broader trade and investment relationships. For Washington, it demonstrates that even in an era of strategic competition, complete technological decoupling may be neither feasible nor desirable when dealing with consumer applications with massive user bases.

Outlook: Durability and Risks

Near-Term Stability (2026)

The deal appears stable through 2026 for several reasons. Both Trump and Xi have invested political capital in the arrangement and face multiple scheduled meetings including Trump’s expected April visit to Beijing and Xi’s reciprocal US visit later in the year. Neither leader wants TikTok to overshadow these high-profile diplomatic engagements.

The trade truce provides a protective umbrella through late 2026, reducing the risk of broader bilateral deterioration that could endanger the TikTok arrangement. Both countries have kept their commitments so far, with China continuing rare earth sales and the US deferring expanded export controls.

Medium-Term Vulnerabilities (2027-2028)

The deal’s durability faces several tests. First, the trade truce expires in late 2026 with no guarantee of renewal. If tariff wars resume or tensions escalate over Taiwan, technology controls, or other flashpoints, TikTok could easily become collateral damage.

Second, US congressional scrutiny poses ongoing risks. Some lawmakers have already demanded deeper investigation of the deal’s structure. If national security concerns resurface, particularly around the algorithm licensing or operational relationships with ByteDance, legislative pressure could force renegotiation or additional restrictions.

Third, the precedent this deal sets matters enormously. If it’s seen as effective at addressing security concerns while preserving commercial operations, it could become a template for other Chinese technology companies operating in Western markets. If it fails to address security issues, it could trigger stricter measures against other Chinese tech firms.

Long-Term Scenarios

Optimistic Scenario: The deal holds, becomes normalized, and demonstrates that creative corporate structures can bridge US-China technology governance gaps. TikTok continues thriving in the US market, and the model is adapted for other contentious technology arrangements. US-China relations stabilize around managed competition rather than confrontation.

Pessimistic Scenario: The trade truce collapses, bilateral relations deteriorate sharply, and TikTok is caught in the crossfire. Evidence emerges of continued ByteDance influence, triggering new regulatory action. The deal unravels, potentially through forced full divestiture, operational restrictions, or an outright ban. This accelerates technological decoupling across multiple sectors.

Most Likely Scenario: The deal survives but remains perpetually fragile, subject to periodic scrutiny and renegotiation as US-China relations fluctuate. TikTok operates under persistent regulatory uncertainty, which constrains its long-term investment and innovation in the US market. The arrangement becomes a barometer of broader bilateral relations, tightening during periods of tension and relaxing when cooperation improves.

Impact on Singapore

Direct Implications

Leadership and Governance: The retention of Singaporean CEO Chew Shou Zi on the oversight board carries symbolic and practical significance for Singapore. It positions a Singaporean leader at the center of a major US-China technology arrangement, potentially elevating Singapore’s profile as a trusted intermediary in technology governance disputes.

Singapore’s ability to produce leaders acceptable to both Washington and Beijing in sensitive roles could become increasingly valuable as technological nationalism intensifies. This creates opportunities for Singaporean professionals in multinational technology companies navigating geopolitical complexities.

Technology Sector Precedent: For Singapore’s ambition to be a neutral technology hub serving both Western and Chinese markets, the TikTok deal offers both hope and warning. The hope is that creative corporate structures can satisfy competing regulatory regimes. The warning is that even careful arrangements remain vulnerable to broader geopolitical shifts.

Singapore-based technology companies with significant operations in both the US and China may face similar pressures to restructure ownership or operations. The TikTok template could inform how these companies navigate such challenges.

Indirect Strategic Implications

Singapore’s Intermediary Role: Singapore has carefully cultivated relationships with both the United States and China, maintaining robust economic ties and security cooperation with Washington while being deeply integrated into Chinese supply chains and investment flows. The TikTok deal validates the continued viability of this balanced approach, at least in the near term.

However, the deal’s fragility also highlights risks to Singapore’s position. If US-China relations deteriorate into a more complete decoupling scenario, Singapore’s ability to remain equally engaged with both powers becomes more challenging. The city-state may face increasing pressure to choose sides on technology standards, data governance, and digital infrastructure.

ASEAN Digital Economy: Singapore leads ASEAN efforts to develop regional digital economy frameworks and cross-border data flow arrangements. The TikTok deal demonstrates that data localization and algorithmic sovereignty concerns are likely to intensify globally. This could accelerate demand for ASEAN’s own digital governance frameworks that balance security, privacy, and economic openness.

Singapore’s experience navigating between US and Chinese technology ecosystems positions it to help shape regional approaches that avoid simply mirroring either American or Chinese models.

Economic and Investment Flows: Chinese technology companies have significant investments in Southeast Asia, including Singapore. If the TikTok precedent leads to more restructuring requirements for Chinese tech firms operating in Western markets, some may relocate regional headquarters or research operations to Singapore as a relatively neutral jurisdiction.

Conversely, if Western governments begin scrutinizing Chinese technology investments more broadly, Singapore-based ventures with Chinese backing could face complications accessing US and European markets, potentially affecting the city-state’s role as a regional investment hub.

Talent and Innovation: Singapore’s technology sector employs significant talent from both China and the West, and its universities attract students from both regions. Intensifying technology competition could disrupt these talent flows if visa restrictions, export control concerns, or security clearance requirements create barriers.

The TikTok deal’s success or failure will influence whether technology sectors can maintain relatively open talent ecosystems or fragment into competing blocs with restricted movement between them.

Policy Considerations for Singapore

Maintain Strategic Flexibility: Singapore should continue resisting pressure to align exclusively with either US or Chinese technology standards and ecosystems. The TikTok deal shows that both powers still value pragmatic arrangements when their interests align, creating space for intermediaries.

Strengthen Data Governance Frameworks: Investing in robust, transparent data protection and cybersecurity standards enhances Singapore’s credibility as a neutral jurisdiction. If Singapore can demonstrate world-class data governance that satisfies both US security concerns and Chinese operational needs, it becomes more attractive as a location for regional operations.

Develop Technology Diplomacy Capacity: The TikTok saga highlights the importance of diplomatic skills in technology governance. Singapore should continue developing expertise in technology policy, digital trade negotiations, and technology standards development to maintain influence as these issues become more geopolitically charged.

Prepare for Multiple Scenarios: Given the uncertainty around the deal’s durability and broader US-China relations, Singapore needs contingency planning for various scenarios. This includes strategies for both intensified cooperation (where Singapore can facilitate exchanges) and sharper decoupling (where Singapore may need to choose carefully which partnerships to prioritize).

Bottom Line for Singapore

The TikTok deal demonstrates that even in an era of intensifying US-China strategic competition, pragmatic compromises remain possible when both powers have sufficient political will. For Singapore, this validates its long-standing approach of maintaining deep engagement with both countries while avoiding exclusive alignment.

However, the deal’s fragility and dependence on broader bilateral relations serve as a reminder that Singapore’s balanced position cannot be taken for granted. The city-state must continue investing in the capabilities, relationships, and frameworks that make it valuable to both sides, while preparing for the possibility that technological decoupling could eventually force more difficult choices.

The presence of a Singaporean CEO in this high-stakes arrangement is both an opportunity and a responsibility, demonstrating Singapore’s potential to contribute to technology governance solutions while also highlighting the scrutiny that comes with occupying the middle ground between competing powers.