TikTok Finalizes U.S. Sale with Oracle and Silver Lake Investors
TikTok has officially entered into an agreement to sell its U.S. operations to three American investors. The investors are Oracle, Silver Lake, and MGX. This strategic move ensures TikTok can maintain its presence in the U.S. market.
TikTok Sale Details
The deal is set to be finalized by January 22, as outlined in an internal memo. CEO Shou Zi Chew communicated these developments to employees, confirming that both TikTok and its parent company, ByteDance, have signed binding contracts with the investors.
Ownership Structure
The new U.S. venture will feature a consortium of investors who will collectively own half of the business. Here’s the breakdown of ownership:
- Oracle: 15%
- Silver Lake: 15%
- MGX: 15%
- Affiliates of existing ByteDance investors: 30.1%
- ByteDance: 19.9%
This ownership structure comes with the establishment of a majority-American board consisting of seven members. The board will oversee critical operations, including content moderation and data security policies.
Data Security Measures
To address national security concerns, user data from TikTok will be stored locally in a system managed by Oracle. Additionally, the app’s algorithm will be retrained using U.S. user data to ensure that the content feed remains unaltered by external influences.
Legislative Background
The agreement represents a significant resolution to prolonged uncertainty regarding TikTok’s viability in the United States. Following bipartisan legislative action, a law was enacted requiring TikTok to divest from its Chinese parent company by January 2025 to avoid a complete shutdown.
Former President Trump initiated executive orders meant to keep TikTok operational while negotiations for a sale progressed. These orders extended deadlines multiple times as efforts to reach an agreement evolved. The last-minute deal signifies a critical turning point for TikTok amidst ongoing scrutiny regarding its origins and data practices.
The agreement with Oracle, Silver Lake, and MGX highlights the tech industry’s capacity to adapt and reassess ownership structures in response to regulatory pressures, ensuring continued service for millions of U.S. users.
