Elon Musk’s xAI secured a federal deal and TikTok’s US restructure gained presidential support. The Commerce Department revised the second quarter GDP upward.
The US equity market closed down on the back of weakness in Oracle, Tesla, and other US companies.
Oracle, Silver Lake, and MGX will be the lead TikTok Investors
Oracle, Silver Lake and Abu Dhabi’s MGX will become TikTok’s US operations’ lead investors under a restructuring proposal aimed at addressing concerns about national security.
CNBC reports that the three companies will own roughly 45% each of TikTok USA, a new company.
ByteDance’s parent company in Beijing will keep 19.9% of the shares, with the remainder going to new and existing investors.
The President Donald Trump will sign an executive ordering endorsing this deal. This follows bipartisan legislation that required ByteDance divest their US business, or risk a ban.
This legislation is a reflection of the ongoing concern over TikTok’s algorithm, and its possible ties with Chinese authorities.
Oracle will be responsible for security operations, and the board of the new entity will consist of a majority US-based members.
Grok, a chatbot developed by xAI for the US Government will be deployed soon
Elon Musk’s AI company, xAI has signed a new deal with the US General Services Administration to provide its chatbot Grok across all federal agencies.
OpenAI’s ChatGPT is available for $1 per year, but Grok will cost $0.42 for each organization.
This agreement forms part of GSA’s “OneGov Strategy,” launched in January to standardize prices, streamline procurement and eliminate contract duplication.
This initiative is in line with the “AI Action Plan” of President Trump, which aims to increase federal adoption and enhance US leadership within artificial intelligence.
Since the spring, other major AI providers such as Meta, Anthropic Google and OpenAI have signed partnerships with government agencies.
US GDP Revised Higher in Q2
Commerce Department revised data shows that the US economy expanded faster than originally estimated during the second quarter.
The gross domestic product increased at an annualized rate of 3.8% from April to June. This was above the initial reading and earlier estimate of 3.3%.
This revision was a result of lower imports, and the resilient consumer spends that offset earlier impacts from stockpiling inventory tied to tariffs.
The figures indicate a more robust rebound after a contraction in the first quarter.
Official estimates are due in the next month from The Federal Reserve Bank of Atlanta.
This announcement comes just a few days after the Fed lowered interest rates, for the first year in a row. The Fed cited deterioration of the labor market as the reason.
US Farmers to benefit from Tariff Revenues
The President announced that he would use the tariff revenue to help US farmers who are affected by unfair trade policies.
Trump, speaking at the White House said that the assistance would help farmers for “a short time” before the tariff benefits materialized.
Brooke Rollins, Agriculture secretary, said that the aid could be provided within a few weeks.
The move is not without legal risks.
Some tariffs have been ruled illegal by lower courts, and the government could be forced to pay back tens or hundreds of millions of dollars in the event that these rulings are confirmed.
Markets decline on Oracle, Tesla weakness
U.S. stocks closed down on Thursday, as falling technology and rising yields weighed on sentiment.
Dow Jones Industrial Average lost 173 points or 0.3%. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average each dropped 0.5%.
Oracle was the worst performer, falling 5% to extend a losing streak of three days amid concerns from investors about the sustainability of artificial intelligence.
Tesla’s share price also dropped sharply by 4%, contributing to the tech sector weakness of today.
The post US digest: TikTok deals advances, xAI win federal contract, GDP revised upward may be updated as new developments unfold.
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