In brief
In a significant move to avert a ban on its operations in the U.S., TikTok's parent company ByteDance has finalized binding agreements with a group of American and global investors, effectively transitioning ownership stakes and licensing key technologies like its recommendation algorithm. This deal, likely to reshape TikTok's future in the American market, involves major investors like Oracle and Silver Lake. The agreement also comes with critiques regarding user data privacy from lawmakers and concerns from users about the platform's evolving landscape.
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 is in line with a deal unveiled in September, when US President Donald Trump delayed the enforcement of a law that would ban the app unless it was sold.
In the memo, TikTok noted that this deal will allow over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.
Under the agreement, ByteDance will retain 19.9% of the business, while Oracle, Silver Lake, and Abu Dhabi-based MGX will hold 15% each. Another 30.1% will be held by affiliates of existing ByteDance investors.
The White House previously confirmed that Oracle will license TikTok's recommendation algorithm as part of the deal.
The agreement comes after a series of delays and a new US law passed under President Biden in April 2024, banning the app over security concerns unless it was sold. That law was set to go into effect on 20 January 2025 but had seen multiple delays during Trump’s negotiations.
Senate Democrat Ron Wyden of Oregon criticized the deal, arguing it wouldn’t enhance the privacy protections for American users. Under the terms, TikTok's recommendation algorithm is set to be retrained on American user data to ensure feeds are free from outside manipulation.
Some users, like small business owner Tiffany Cianci, expressed concerns regarding the incoming investors while hoping that their experience on the platform remains intact. I hope small business owners are protected, she said, highlighting her reliance on TikTok for promoting her business.
