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TikTok has reached an agreement to transfer its U.S. operations to three American entities: Oracle, Silver Lake, and MGX, securing its presence in the American market.
SAN FRANCISCO(AP) — In a strategic move, TikTok is set to hand over its U.S. business to Oracle, Silver Lake, and MGX, a decision that will allow the beloved social media app to maintain its foothold in the United States.
According to an internal communication obtained by The Associated Press, the transaction is slated for completion on January 22. TikTok’s CEO, Shou Zi Chew, informed staff through the memo that definitive agreements have been inked with the trio of investors.
The newly formed U.S. TikTok joint venture will be split among investors, with Oracle, Silver Lake, and MGX each acquiring a 15% stake. An additional 30.1% will be owned by affiliates of current ByteDance investors while ByteDance itself, based in China, will retain a 19.9% share, as outlined in the memo.
The memo further detailed that the venture would be overseen by a seven-member board predominantly composed of American directors. The structure aims to bolster data protection for Americans and enhance U.S. national security.
U.S. 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 U.S. user data to “ensure the content feed is free from outside manipulation,” the memo said. The U.S. 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 U.S. 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 U.S. 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.
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