TikTok US operations secured after sale agreement with American investors

TikTok has agreed to sell its US business to investors Oracle, Silver Lake and MGX, with the deal expected to close on January 22. The new venture will store user data locally, retrain its algorithm on US data and operate under American majority oversight, ending uncertainty over a potential US ban

San Francisco: TikTok has signed a deal to sell its US business to three American investors — Oracle, Silver Lake and MGX — ensuring the popular social video platform can continue operating in the United States.

The deal is expected to close on January 22, according to an internal memo seen by The Associated Press. CEO Shou Zi Chew told employees in the memo that ByteDance and TikTok have signed binding agreements with the three investors.

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Half of the new TikTok US joint venture will be owned by a consortium of investors — among them Oracle, Silver Lake and MGX will each hold a 15 per cent share. Another 30.1 per cent will be held by affiliates of existing ByteDance investors and 19.9 per cent will be retained by the China-based ByteDance, according to the memo.

The US venture will have a new, seven-member majority-American board of directors, the memo said. It will also be subject to terms that “protect Americans’ data and US national security.”

US user data will be stored locally in a system run by Oracle.

TikTok’s algorithm — the secret sauce that powers its addictive video feed — will be retrained on US user data to “ensure the content feed is free from outside manipulation,” the memo said. The US venture will also oversee content moderation and policies within the country.

The deal marks the end of years of uncertainty about the fate of the popular video-sharing platform in the United States. After wide bipartisan majorities in Congress passed — and President Joe Biden signed — a law that would ban TikTok in the US if it did not find a new owner in the place of China’s ByteDance, the platform was set to go dark on the law’s January 2025 deadline. For a several hours, it did. But on his first day in office, President Donald Trump signed an executive order to keep it running while his administration tries to reach an agreement for the sale of the company.

Three more executive orders followed, as Trump, without a clear legal basis, continued to extend the deadline for a TikTok deal. The second was in April, when White House officials believed they were nearing a deal to spin off TikTok into a new company with US ownership that fell apart after China backed out following Trump’s tariff announcement. The third came in June, then another in September, which Trump said would allow TikTok to continue operating in the United States in a way that meets national security concerns.