TikTok finalizes deal for its US entity

TikTok has finalized the deal for its US unit, with its parent company ByteDance selling its majority stake to a group of non-Chinese investors. The deal was closed just before the Trump administration’s latest deadline, banning the app in the US unless it was spun off from ByteDance, which would retain only 20 percent of the new entity. TikTok investors will hold an 80 percent stake, while Oracle, Silver Lake and MGX, an Emirate-state-owned investment firm, will each take a 15 percent stake. Other investors include the investment firm of Dell’s CEO.

Terms of the deal were first leaked last month, when TikTok CEO Shaw Chew reportedly told employees in a memo that TikTok and ByteDance had agreed to a consortium of investors. This ends a long saga and months of slow progress as the agreement was being worked out, ensuring that the app will remain available in the US even after the country spent years on the brink of a ban.

According to TikTok’s announcement, the joint venture will protect US users’ data with Oracle’s secure US cloud environment. It will also retrain TikTok’s algorithms on data from US users and be in charge of content moderation in the US. The unit promises interoperability, while also promising that users will still get international content and, if they’re creators, viewers too. “The security measures provided by the joint venture will also cover Capcut, Lemon8, and its portfolio of other apps and websites in the US,” TikTok said.

The new entity will be overseen by a seven-member board of directors, the majority of whom are Americans. This includes TikTok CEO Shaw Chew, Silver Lake co-CEO Egon Durban, Oracle Executive Vice President Kenneth Glueck and MGX chief strategy and security officer David Scott.