The Trump administration recently approached a coalition of U.S. investors set to take over TikTok's U.S. operations with an ask: Will the group make a payment to the federal government "in the low billions," according to a person with direct knowledge of the talks.
The response from the investors, which includes tech mogul Larry Ellison, the Murdochs and venture capital heavyweight Andreessen Horowitz, was an unequivocal yes.
"Not a single member balked," said the person, who was not authorized to speak publicly. "They see it as something of a finders' fee."
Welcome to President Trump's new business agenda: Extracting payments as if the federal government is brokering deals like a white-shoe consulting firm fueled by lucrative "fees for service."
Whether it's the U.S. taking 15% of Nvidia and AMD's chip sales to China, the federal government securing a "golden share" in U.S. Steel or the Trump administration reportedly seeking an equity stake in Lithium Americas as part of a government loan negotiation, the White House is on a campaign of squeezing businesses with few parallels in modern history.
"At a minimum, this now means there is a tax imposed on every major business transaction," said Luigi Zingales, a professor of finance at the University of Chicago. "But even worse, businesses will no longer be focused on innovating and creating value and instead the whole game now is rent-seeking. It's all about ingratiating yourself with Trump."
The White House did not return a request for comment.
Asked on Thursday about the multibillion-dollar fee expected to be tacked onto the TikTok deal, which was earlier reported by The Wall Street Journal, Trump was evasive.
"We're going to be announcing different things, but the U.S. comes out great," Trump said from the Oval Office.
Trump has been more direct about defending his administration's private business interventions, including after Intel agreed to sell a 10% stake of the company to the U.S. government following Trump's calls for its chief executive to resign.
"The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL," Trump posted last month.
Many media companies capitulate to Trump pressure
This pattern has played out across media, where Trump's longtime war against news organizations has escalated into marshaling the might of the federal government to force concessions.
The parent companies for ABC and CBS both settled lawsuits for $16 million following Trump lawsuits alleging mistreatment by the networks. The payments went to Trump's presidential library foundation and Trump's legal fees. Shortly after CBS's payment, federal regulators approved the sale of its parent company, Paramount, to Skydance Media, which is controlled by the Ellison family.
Media companies were already signaling their acquiescence to Trump before he won a second term.
Ahead of the election, the billionaire owners of The Washington Post and The Los Angeles Times killed parallel editorial endorsements of Kamala Harris. They soon rewired their editorial pages to be less critical of Trump. Both owners — Amazon founder Jeff Bezos for the Post and medical innovator Dr. Patrick Soon-Shiong for the Los Angeles Times —have major business interests that hinge on decisions by federal officials.
Then there is Jimmy Kimmel. Last week, Disney — which owns ABC — suspended the late-night host after Federal Communications Chairman Brendan Carr threatened action over Kimmel's remarks about the assassination of conservative activist Charlie Kirk. After a public outcry, including from First Amendment scholars, Kimmel returned, on Tuesday, with the blessing of ABC and Disney.
Trump lashed out at the network's reversal.
"I can't believe ABC Fake News gave Jimmy Kimmel his job back," Trump wrote on Truth Social, writing in the same post: "I think we're going to test ABC out on this. Let's see how we do. Last time I went after them, they gave me $16 Million Dollars."
Trump allies landing deals sparks criticism of "crony capitalism"
Among those the Trump White House has lined up to take the reins of TikTok's U.S. operation are Rupert and Lachlan Murdoch, the controlling owners of Fox News, The New York Post and The Wall Street Journal.
From one view, it can be seen as recognition of the friendly coverage the president often receives from Fox and The Post.
But Trump and Murdoch have also been at odds. That strife was highlighted in July when Trump sued The Journal and Murdoch over the paper's reporting on the disgraced late financier Jeffrey Epstein.
The Murdochs' role in the take-over of America's most popular video app is a remarkable victory for the family and follows a relationship that has at times been combative.
"If you look at Fox News on the one hand and The Wall Street Journal editorial page on the other, I think it's very clear that Rupert Murdoch wants to have bets on every square on the roulette table," says Richard Tofel, who was the former assistant publisher of the Wall Street Journal prior to Murdoch's 2007 acquisition of the paper.
But most of the stakeholders in the TikTok investment group are business leaders who have shown sustained loyalty to the president, which makes the deal look like a reward for fealty, Tofel says.
"There is a growing set of examples of crony capitalism that the Trump administration is putting into place across this country," says Tofel, a lawyer who later went on to become president of the non-profit investigative news site ProPublica. "American industry — which would have regarded this behavior from a Democrat as anathema and inconsistent with the tenets of unfettered capitalism — is rolling over for it time after time."
Experts say U.S. economy being undermined by 'shake-down schemes'
The exact template has varied. In the case of TikTok, the administration is seeking a fee for service. With Intel, the federal government is acquiring an equity stake. For chip-makers Nvidia and AMD, meanwhile, the demand was for a slice of future profits. And with the network television settlements, the payouts arose after personal legal disputes.
"There is no consistent principle at play, just the exercise of Trump's personal power over other people's money," said Dael Norwood, associate professor of history at the University of Delaware, who notes that the winners and losers are clear.
"All Americans – taxpayers, investors, customers, and workers – lose with crony capitalism," he said. "It increases everyone's costs, makes everyone more vulnerable to extortion (or worse), and profoundly degrades our expectations for honesty and fair dealing, society-wide."
In public, corporate executives show support to the president and appear to back such deals, but behind closed doors, some business leaders are expressing deep concern.
Yale School of Management professor Jeffrey Sonnenfeld recently helped organize a gathering of more than 100 top CEOs, and he said there was near-unanimous consensus in surveys conducted at the event that Trump's interventions in private business are undermining America's free market principles.
"These are shake-down schemes. It's a gross violation of what capitalism is supposed to stand for. I'd even call it extortion," Sonnenfeld said. "Privately, CEOs are horrified."
But Sonnenfeld said executives are not banding together to push back on Trump, as top business leaders did following Trump's election denialism in November 2020.
"CEOs need to speak up, like they did then, but they aren't doing it publicly," Sonnenfeld said. "Fear of retaliation is motivating the silence, but there has got to be a trigger line to stop this,"We just don't know what that is yet."
Talks with American investors for a potential acquisition of TikTok's U.S. enterprise have been moving in fits and starts for the past five years, starting back when the Trump administration declared the Chinese-owned hit video app to be a national security threat and sought to have it banned.
Since Trump's about-face and embrace of TikTok, it has been clear that software and cloud-computing company Oracle would be a major player in the bid to take over the app's American presence.
Oracle co-founder Larry Ellison is a close confidante of Trump and the president has said both publicly and in private that he'd like to see TikTok controlled by Oracle.
According to the source with direct knowledge of the talks, many of the deal's provisions have been under discussion for months, including that Oracle will host and oversee all of Americans' TikTok data. Beijing-based ByteDance will license its algorithm to the U.S. entity to be re-trained based only on the 170 million U.S. users of the app and ByteDance will keep a minority stake in the company.
The one part of the agreement that caught investors by surprise? The multibillion-dollar fee request.
"They were taken aback when they were told they'd have to kick in," the source said. "But I think they see it as just the price of doing business right now."
Copyright 2025 NPR
