TikTok Strikes Last-Minute Deal to Avoid U.S. Ban
TikTok avoids a U.S. ban as ByteDance signs a landmark deal with investors, easing national security fears and securing the app for 170M Americans.
TikTok's Chinese owner, ByteDance, has signed binding agreements with US and global investors for the majority of its US business, TikTok's CEO told employees on Thursday.
According to a memo sent by Chief Executive Shou Zi Chew, half of the joint venture will be owned by a group of investors including Oracle, Silver Lake, and Emirati investment firm MGX.
The deal, which is expected to close on January 22, will end years of efforts by Washington to force ByteDance to sell its US operations over national security concerns.
It is consistent with a deal that emerged in September, when US President Donald Trump delayed implementing a law that would have banned the app unless it was sold.
In the memo, TikTok said the deal will "enable more than 170 million Americans to continue exploring a world of endless possibilities as part of a vibrant global community."
Under the agreement, ByteDance will retain a 19.9% stake in the business, while Oracle, Silver Lake, and Abu Dhabi-based MGX will each hold a 15% stake.
The remaining 30.1% will be held by affiliates of existing ByteDance investors, according to the memo.
The White House had previously said that Oracle, co-founded by Trump supporter Larry Ellison, would license TikTok's recommendation algorithms as part of the deal.
In April 2024, during President Joe Biden's administration, the US Congress passed a law to ban the app over national security concerns unless it was sold.
The law was set to take effect on January 20, 2025, but Trump delayed it several times while his administration worked on a deal to transfer ownership. Trump said in September that he had spoken by phone with Chinese President Xi Jinping, who had reportedly given the deal his blessing.
Software Services
 |
Launch your own casino platform today — get started now |
The platform's future remained uncertain after the leaders met in person in October.
The app's fate hung in the balance due to ongoing tensions between the two countries over trade and other issues.
"TikTok has become a bargaining chip in the broader US-China relationship," said Alvin Graylin, a lecturer at the Massachusetts Institute of Technology. "With the recent easing of tensions, Beijing's sign-off on the structure and algorithm licensing now looks less like a surrender and more like a calculated de-escalation, allowing both capitals to claim victory at home."
Oracle and Silver Lake declined to comment.
The deal was criticized by Oregon Senator Ron Wyden, a Democrat, who said it "will do nothing to protect the privacy of American users."
Under the terms, TikTok's recommendation algorithms would be retrained on US user data to ensure that feeds are free from external manipulation.
"It's not clear that this will even put TikTok's algorithms in safe hands," Senator Wyden said.
He opposed the 2024 legislation and was among the US lawmakers who lobbied in January to extend TikTok's deadline to give Congress more time to address the threats posed by China.
Some users also expressed caution about the prospect of new investors.
Tiffany Cianci, a small business owner with more than 300,000 followers and nearly four million likes on the platform, said she hoped that any incoming investors would maintain the user experience for entrepreneurs like herself.
"I hope that small business owners will be protected," Ms. Cianci said. TikTok has stated that more than seven million small businesses in the United States market their products and services on the platform.
She added, "I've reserved my judgment on whether we've saved the app for those small businesses."
Ms. Cianci said she chose TikTok for promotion because the platform offers more favorable profit-sharing terms compared to competitors like Meta.
Over the past year, Ms. Cianci has been active in organizing protests in Washington and on TikTok with the goal of saving the app.
Thank you for reading this content.
What's Your Reaction?
Like
0
Dislike
0
Love
0
Funny
0
Angry
0
Sad
0
Wow
0
