The US TikTok Deal: What You Need to Know

For four years, the popular video-sharing platform TikTok has navigated a complex political landscape in the United States, driven by persistent concerns over data security and its ownership by the Chinese firm ByteDance. This tension has directly impacted millions of American users, who faced a brief but alarming app outage earlier this year before service was restored. Following a prolonged period of legal challenges and negotiations, a significant resolution has emerged. A deal has now been formally signed, transferring a substantial portion of TikTok’s U.S. operations to a consortium of American investors, nearly three months after an executive order paved the way for the sale. This agreement followed public statements from ByteDance assuring the app’s continued availability in the U.S. and indications that Chinese leadership approved the arrangement.

So, who will own TikTok in the United States? According to details from an internal memo, a group comprising Oracle, the private equity firm Silver Lake, and investment firm MGX will collectively hold a 45% stake in the American operation. ByteDance will retain close to 20% ownership. Reports value the U.S. entity at roughly $14 billion. This new structure follows a previously discussed framework where American investors were expected to control a dominant share. A newly established entity, “TikTok USDS Joint Venture LLC,” will manage all U.S. operations, focusing on critical areas like data protection, algorithm security, and content moderation.

In this arrangement, Oracle is designated as the trusted security partner, tasked with auditing compliance with national security terms. The company, which already provides cloud services for TikTok in the U.S., will play a central role in securing a new American version of the platform’s algorithm. Under the reported plan, the U.S.-based owners will lease the core algorithm from ByteDance, and Oracle will then be responsible for retraining it. Crucially, ByteDance will have no access to U.S. user data or any influence over the algorithm’s operation stateside. The transaction is slated for completion in early 2026.

What does this mean for the average user? Some reports suggest that upon the deal’s finalization, the current TikTok app may be discontinued in the U.S., requiring a migration to a new platform. The exact nature, features, and differences of this new application remain unclear at this stage.

The path to this point has been lengthy and contentious. The saga intensified in August 2020 when an executive order sought to ban transactions with ByteDance. Efforts to force a sale to U.S. companies like Microsoft and Oracle ensued, though legal injunctions allowed TikTok to continue operating. Momentum shifted under the Biden administration, which ultimately signed legislation targeting the app. TikTok responded with a lawsuit, arguing the move violated constitutional rights and denying any security threat, stating its U.S. data practices are lawful.

Interestingly, former President Trump’s position has evolved, and he has since advocated for a different ownership split. The investor landscape has been crowded, with various groups expressing interest. One notable consortium, organized by Project Liberty’s Frank McCourt and supported by Guggenheim Securities, included backers like Reddit co-founder Alexis Ohanian and investor Kevin O’Leary. Another group, led by Employer.com founder Jesse Tinsley, involved figures such as Roblox co-founder David Baszucki and YouTuber MrBeast. Other rumored contenders spanned from major tech firms like Amazon and Microsoft to individuals such as former Activision CEO Bobby Kotick and former Treasury Secretary Steven Mnuchin.

(Source: TechCrunch)