After Years of Uncertainty, TikTok Signs Deal to Sell Its U.S. Operations
However, the deal’s details remain unclear, with the exact terms of the agreement yet to be disclosed.
The joint venture, named “TikTok USDS Joint Venture LLC,” will be jointly owned by American investors and ByteDance.
Under the agreement, Oracle, Silver Lake, and Abu Dhabi-based MGX will collectively hold a 45 percent stake in the company.
TikTok’s U.S. Saga Nears Its End
Meanwhile, the deal is expected to close on January 22, bringing TikTok closer to complying with a U.S. law requiring its Chinese parent company to sell the app’s American business.
Consequently, the U.S. entity will take over responsibility for U.S. data protection, algorithm security, content moderation, and software assurance.
In addition, TikTok’s content recommendation algorithm will be retrained using U.S. user data, ensuring the platform’s feed is “free from outside manipulation.”
Background on the Deal
However, negotiations over a sale have been marked by uncertainty and geopolitical tension, with the Chinese government expressing opposition to a forced divestment.
Therefore, the White House and Chinese officials reached a deal in principle in September for a U.S.-controlled joint venture led by investors including Andreessen Horowitz, Silver Lake, and Oracle.
Moreover, the move would end a saga that began in 2020, when Trump first issued an executive order seeking to force ByteDance to sell TikTok’s U.S. business over national security concerns.
Key Players Involved
However, the deal’s success depends on the cooperation of all parties involved, including ByteDance, American investors, and the U.S. government.
Therefore, the joint venture will be jointly owned by a group of American investors and ByteDance, with Oracle, Silver Lake, and Abu Dhabi-based MGX holding a 45 percent stake.
In addition, affiliates of existing ByteDance investors will own nearly one-third, while ByteDance itself will retain just under 20 percent.
Conclusion
However, the deal’s impact on TikTok’s U.S. operations remains to be seen, with the company’s future hanging in the balance.
Therefore, the deal’s success will depend on the cooperation of all parties involved, including ByteDance, American investors, and the U.S. government.
Moreover, the joint venture will take over responsibility for U.S. data protection, algorithm security, content moderation, and software assurance.
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