TikTok Deal Marks New Chapter in App’s History
A year after a federal law effectively banned TikTok in the US, a deal has been signed to sell the app’s American operations to a joint venture of US-based investors. The bipartisan law, passed in 2024, required TikTok’s China-based parent company, ByteDance, to sever ties with the social media platform’s American operations or lose access to US app stores and web-hosting services.
The law, which was unanimously upheld by the Supreme Court, made it unlawful for app stores to offer updates or new downloads after January 19, 2025. However, President Trump has issued executive orders directing the Justice Department not to penalize tech companies hosting TikTok, keeping the app widely available in the US despite the ban. According to a White House official, the new deal will see a group of US-based investors, including Oracle and Silver Lake, take over TikTok’s American operations.
Details of the Deal
The joint venture, which includes Oracle, Silver Lake, and Abu Dhabi-based MGX, will own 45% of the company, with another 35% owned by eight other investors, including Dell CEO Michael Dell’s personal investment office. ByteDance will retain 19.9% of the company, just below the 20% cap allowed under the law. The deal aims to address concerns about the app’s ties to the Chinese government and the potential risks to national security.
Under the new structure, the app’s US operators will “retrain, test, and update” the content recommendation algorithm using data from American users. Oracle will also review and validate the source code on an ongoing basis. The US version of the app will be interoperable with the version used by the rest of the world, allowing Americans to access global content.
Concerns and Questions
The arrangement has raised concerns about whether it meets the threshold of separation from ByteDance intended by lawmakers. The law states that there cannot be any operational relationship between the new owners and ByteDance, including cooperation on the algorithm and data sharing. GOP Rep. John Moolenaar of Michigan, chairman of the House Select Committee on the Chinese Communist Party, has announced a public hearing to focus on two key questions: whether the deal ensures the Chinese Communist Party does not have influence over the algorithm and whether American data is secure.
Lawmakers and US officials have long sounded the alarm about the risks posed by TikTok, including the potential for the Chinese government to use the app to spy on Americans, collect data, and carry out influence operations. The Justice Department has previously rejected the notion that Oracle could have sufficient oversight of user data and the algorithm to alleviate national security concerns.
Next Steps
The deal marks a new chapter in TikTok’s history, but questions remain about its implications for national security and data protection. As the situation develops, it is essential to consider the potential consequences of the deal and ensure that the rights and interests of American users are protected. For more information, visit Here to stay up-to-date on the latest developments.
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