TikTok’s Chinese owner ByteDance has signed binding agreements that will give US and global investors majority ownership of the app’s American business, a move aimed at resolving long-running US national security concerns. TikTok chief executive Shou Zi Chew told employees the deal is set to close on 22 January and would allow the platform to continue operating in the United States.
Ownership structure and investors
In a memo sent to staff on Thursday, Chew said 50% of the new joint venture will be owned by a group of investors that includes Oracle, Silver Lake, and Abu Dhabi-based investment firm MGX. ByteDance will retain a 19.9% stake.
Under the agreement, Oracle, Silver Lake, and MGX will each hold 15%. A further 30.1% will be owned by affiliates of existing ByteDance investors, according to the memo.
TikTok said the arrangement will allow “over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.”
Background to the agreement
The deal aligns with an outline agreement announced in September, when US President Donald Trump delayed enforcement of a law that would have banned TikTok unless ByteDance sold its US operations.
That law was passed by Congress in April 2024, during President Joe Biden’s administration, citing national security concerns. It was due to take effect on 20 January 2025 but was postponed multiple times by Trump while negotiations continued.
Trump said in September that he had spoken with Chinese President Xi Jinping, who he said approved the deal. However, uncertainty remained after the two leaders met in person in October.
Algorithm control and political reaction
The White House has previously said Oracle will license TikTok’s recommendation algorithm as part of the agreement. Under the terms, the algorithm is expected to be retrained using US user data to ensure feeds are not influenced by external actors.
Senate Democrat Ron Wyden of Oregon criticised the deal, saying it would not protect the privacy of American users. He said it was unclear whether the arrangement would place TikTok’s algorithm under safer control.
Wyden opposed the 2024 law and was among lawmakers who pushed to extend the January deadline to give Congress more time to address concerns about China.
The White House referred questions to TikTok. Oracle and Silver Lake declined to comment, while MGX has been contacted for comment.
User and small business concerns
Some TikTok users expressed caution about the involvement of new investors. Tiffany Cianci, a small business owner with more than 300,000 followers on the platform, said she hopes the changes will preserve the experience for entrepreneurs.
She said TikTok’s profit-sharing terms are more favourable than those offered by competitors such as Meta and added that she would reserve judgement on whether the deal protects small businesses.
TikTok has said more than seven million small businesses in the US use the platform to market products and services. Cianci said she has spent the past year organising protests in Washington and on TikTok aimed at keeping the app available in the country.
Featured image credits: Heute.at
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