The TikTok Deal: A $10 Billion Payment and the Rise of the New Command Economy
In late December 2025, TikTok reached an agreement to spin off its U.S. Operations to a group of investors led by Oracle, Silver Lake, and Abu Dhabi’s MGX. This move, seemingly concluding a five-year saga, involved a complex arrangement rooted in national security concerns and a controversial payment structure.
The Origins of the Deal: PAFACAA and National Security Concerns
The agreement stems from the Protecting Americans From Foreign Adversary Controlled Applications Act (PAFACAA), passed by Congress in 2024. This legislation aimed to force ByteDance, TikTok’s China-based parent company, to divest from TikTok to mitigate perceived national security threats posed by the app’s algorithm. The Committee on Foreign Investment in the United States (CFIUS) had previously reviewed ByteDance’s acquisition of TikTok, but PAFACAA expedited the process.
A Controversial Agreement: Payments and Potential Conflicts
The Oracle-Silver Lake-MGX deal, approved by President Donald Trump, immediately sparked controversy. Some critics argued it didn’t fully comply with PAFACAA, as ByteDance retained a stake in the U.S. Company. Others speculated about the influence of Trump’s relationship with Oracle’s founder, Larry Ellison, while concerns were raised about potential censorship of content critical of the President. Crucially, the full details of the agreement remained undisclosed.
The $10 Billion Payment
On March 13, 2026, the Wall Street Journal revealed that the TikTok investors paid approximately $2.5 billion to the U.S. Government upon closing, with billions more to be paid over time, totaling $10 billion. This revelation prompted further scrutiny, as the legal basis for such a payment remained unclear.
The “New Command Economy” and its Risks
This case exemplifies what has been termed the “new command economy” (NCE), where the U.S. Government increasingly utilizes economic tools for national security purposes. This approach has led to greater entanglement between the government and corporations, including equity investments in critical minerals companies, reliance on companies for export control enforcement, and the use of corporate proxies to advance national security interests. The TikTok payment demands represent a particularly concerning aspect of this trend.
Distorted Decision-Making
The payment demands distort decision-making for both the government and companies. The government may be incentivized to approve deals based on financial gain rather than genuine national security concerns. Companies, fearing repercussions, may agree to unfavorable terms to maintain a positive relationship with the government.
Potential Illegality and Lack of Transparency
The legal authority for these payments is questionable, and the lack of transparency surrounding the deal raises concerns about potential unlawful acts. The absence of public information about how the $10 billion will be used further exacerbates these concerns.
Conflicts of Interest
Government officials, their families, and Trump administration associates have financial interests in the deals, creating potential conflicts of interest that could compromise the integrity of the decision-making process.
The Need for Congressional Action
To address these risks, Congress should ban the government from demanding payments from regulated parties for national security approvals and prohibit companies from making such payments. This would ensure that national security decisions are based on legitimate security concerns, not financial incentives. Such a ban should include robust penalties for violations and extend to government officials.
The TikTok case highlights the dangers of blurring the lines between national security and financial gain. Protecting national security should not come at the cost of economic integrity and transparency.
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