In brief
TikTok's owner, ByteDance, has entered binding agreements with US investors, establishing a joint venture that aims to keep the highly popular platform operational in the US. This deal, which includes firms like Oracle and MGX, is set to close on January 22, 2025, and comes after years of regulatory pressure on ByteDance regarding security issues. The arrangement allows for continued access to TikTok for over 170 million users in America amid ongoing geopolitical tensions between the US and China.
TikTok's Chinese owner ByteDance has signed binding agreements with US and global investors to operate its business in America, TikTok's boss told employees on Thursday.
Half of the joint venture will be owned by a group of investors, including Oracle, Silver Lake and the Emirati investment firm MGX, according to a memo sent by chief executive Shou Zi Chew.
The deal, which is set to close on 22 January, would end years of efforts by Washington to force ByteDance to sell its US operations over national security concerns.
It aligns with a deal unveiled in September, when US officials delayed the enforcement of a ban on the app unless it was sold.
In the memo, TikTok stated the deal will enable over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.
ByteDance will maintain a 19.9% stake, with Oracle, Silver Lake, and MGX each holding 15%. The remaining 30.1% will be held by affiliates of existing ByteDance investors.
The White House previously announced that Oracle would license TikTok's recommendation algorithm as part of the agreement. The deal has been facilitated amid a backdrop of political and economic uncertainties surrounding US-China relations, with TikTok described as a 'bargaining chip' in this diplomatic context.
However, concerns about user privacy remain. Some critics in Congress argue this arrangement does little to protect American users from potential data exploitation, urging caution regarding the implications of new investors on the platform. Small business owners who have flourished on TikTok express hope that their user experience will not be negatively impacted under the new ownership structure.
