Ask Onix
TikTok finalizes US ownership deal with global investors
TikTok's parent company, ByteDance, has signed binding agreements with American and international investors to ensure the app's continued operation in the United States, CEO Shou Zi Chew announced in a memo to employees on Thursday.
Structure of the joint venture
The agreement, set to close on 22 January, allocates half of the new US-based entity to a consortium including Oracle, private equity firm Silver Lake, and Abu Dhabi's MGX. ByteDance will retain a 19.9% stake, while Oracle, Silver Lake, and MGX will each hold 15%. The remaining 30.1% will be owned by affiliates of existing ByteDance investors.
National security and political backdrop
The deal resolves years of pressure from Washington to divest TikTok's US operations over espionage and data privacy risks. In April 2024, Congress passed legislation requiring ByteDance to sell the app or face a ban, with an initial deadline of 20 January 2025. The Trump administration later delayed enforcement, citing progress on ownership negotiations.
Former President Donald Trump revealed in September that Chinese President Xi Jinping had approved the deal during a phone call. However, uncertainty persisted after the two leaders met in person in October, amid broader US-China tensions on trade and technology.
"TikTok has become a bargaining chip in the wider US-China relationship. With recent softening tensions, Beijing's sign-off now looks like calibrated de-escalation, allowing both sides to claim victory,"
Alvin Graylin, MIT lecturer
Algorithm and data safeguards
As part of the agreement, Oracle will license TikTok's recommendation algorithm, which will be retrained on US user data to prevent external manipulation. The White House previously endorsed the arrangement, though critics remain skeptical.
Senator Ron Wyden, a Democrat from Oregon, argued the deal fails to address privacy concerns, stating it would not "protect the privacy of American users." Wyden, who opposed the 2024 divestment law, had lobbied for extensions to allow Congress more time to address perceived threats.
Reactions from users and businesses
TikTok emphasized the deal's benefits for its 170 million US users, framing it as a victory for creativity and community. However, some small business owners expressed caution. Tiffany Cianci, a creator with over 300,000 followers, said she hopes the new investors will preserve the platform's favorable terms for entrepreneurs.
"I reserve judgement on whether we've saved the app for small businesses. I chose TikTok because it offered better profit-sharing than competitors like Meta,"
Tiffany Cianci, small business owner
Cianci, who has organized protests in Washington and on TikTok to oppose the ban, noted that over seven million US businesses rely on the platform for marketing.
Next steps and unanswered questions
The White House declined to comment, referring inquiries to TikTok. Oracle and Silver Lake also did not respond to requests for comment, while MGX has yet to issue a statement. The deal's long-term impact on user data and algorithmic transparency remains a subject of debate.
