Who Owns TikTok? Key Facts About Its US Operations
▼ Summary
– ByteDance created a separate U.S. entity to run TikTok’s American operations, aiming to address data privacy and foreign control concerns.
– This restructuring was mandated by a 2024 U.S. law and results in ByteDance owning only a 19.9% stake in the new U.S. venture.
– The new entity, TikTok USDS Joint Venture LLC, licenses its algorithm from ByteDance but independently manages data protection and content moderation.
– Oracle, Silver Lake, and MGX are the managing investors, each holding a 15% stake and providing security oversight, capital, and strategic direction.
– Oracle acts as the security partner auditing compliance, while MGX’s involvement could influence TikTok’s AI direction due to its focus on AI investments.
The ownership structure of TikTok’s U.S. operations has undergone a significant transformation, driven by legislative action and national security concerns. ByteDance, the Chinese parent company, has established a distinct American entity to manage the platform domestically. This restructuring directly responds to a 2024 U.S. law mandating the separation of TikTok from its Chinese ownership, aiming to safeguard American user data from potential foreign access. The newly formed “TikTok USDS Joint Venture LLC” now operates with a majority of its ownership held by non-Chinese investors.
Under this new arrangement, ByteDance retains only a 19.9% stake. The remaining 80% is controlled by a consortium of American and international investors. This entity licenses the core recommendation algorithm from ByteDance but independently manages all critical functions, including content moderation, data protection, and software security controls. The primary managing investor group consists of three major firms: Oracle, Silver Lake, and MGX, each holding a 15% stake for a combined total of 45% ownership of the U.S. business.
Oracle serves as the pivotal security and technology partner in this venture. A giant in cloud computing and database management, Oracle already provides the cloud infrastructure that hosts U.S. TikTok user data. Its role has expanded under the new deal to include auditing TikTok’s compliance with U.S. security mandates, managing data storage protocols, and overseeing updates to the content recommendation algorithm. It is noteworthy that Oracle co-founder Larry Ellison, who maintains a high profile in both technology and political circles, has previously expressed support for former President Donald Trump.
MGX introduces a unique international dimension as an AI-focused investment firm based in the United Arab Emirates. Founded by Abu Dhabi’s sovereign wealth fund Mubadala and the Emirati AI company G42, MGX’s investment grants it potential influence over TikTok’s strategic direction in artificial intelligence. The firm has a portfolio that includes stakes in prominent AI ventures like xAI, Anthropic, and OpenAI. MGX was also part of a major $100 billion AI data center initiative announced during the Trump administration, a project that involves Oracle as well.
Silver Lake rounds out the core investor trio as a leading U.S. private equity firm with a deep history in technology investments. Its role is primarily financial and strategic, providing capital and industry expertise to guide the platform’s growth. Silver Lake’s extensive portfolio includes past and present stakes in companies like Airbnb, Dell, and Waymo. The firm has existing business relationships with both MGX and G42, having collaborated on deals such as the acquisition of a majority stake in the chip company Altera.
Other investors hold the remaining ownership, completing a complex corporate structure designed to insulate the popular social media app’s American operations from its Chinese origins. This sweeping change represents one of the most consequential corporate reorganizations in recent history, fundamentally altering the control and oversight of a platform used by millions across the United States.
(Source: TechCrunch)
