TikTok has signed a deal to divest its U.S. entity to a joint venture controlled by American investors, per an internal memo seen by Axios.
A deal would end a yearslong saga to force TikTok's Chinese parent ByteDance to sell the company's U.S. operation to domestic owners to alleviate national security concerns.
The agreement is set to close on Jan. 22, per an internal memo sent by CEO Shou Chew.
Oracle, Silver Lake and Abu Dhabi-based MGX will collectively own 45% of the U.S. entity, which will be called "TikTok USDS Joint Venture LLC."
Nearly one-third of the company will be held by affiliates of existing ByteDance investors, and nearly 20% will be retained by ByteDance.
The U.S. joint venture will be responsible for U.S. data protection, algorithm security, content moderation and software assurance, per the memo.
It will be responsible for "retraining the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation."
"A trusted security partner will be responsible for auditing and validating compliance with the agreed upon National Security Terms, and Oracle will be the trusted security partner upon completion of the transaction," the memo notes.
Upon the closing, the U.S. joint venture "will operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation and software assurance, while TikTok global's U.S. entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing," it adds.
The deal values TikTok U.S. at around $14 billion, a source confirmed to Axios.
The White House and the Chinese government hammered out a deal in principle in September to sell TikTok's U.S. operations to a joint venture controlled by a U.S. investor group led by Andreessen Horowitz, Silver Lake and Oracle.
Posted by John3262005
4 Comments
After several extensions of the deadline, the deal for Tiktok is nearing its end.
*Oracle, Silver Lake and Abu Dhabi-based MGX will collectively own 45% of the U.S. entity, which will be called “TikTok USDS Joint Venture LLC.”*
*Nearly one-third of the company will be held by affiliates of existing ByteDance investors, and nearly 20% will be retained by ByteDance.*
However, I don’t know if this is what people had in mind when the law was passed and upheld by the Supreme Court.
Definitely not the investors you want to see.
I guess we will see what differences will occur come Jan.22
Apparently, the law that made this happen called for no more than 20 percent of TikTok to be owned by people or corporations in China.
14 billion is an undervalued imo
Oracle — so, a company in Trump’s pocket.
No way this can go wrong.
This happening in the year of the midterms is going to go crazy. I don’t mean to sound like a conspiracy theorist but when TikTok has your locational data, they can selectively ensure that certain content (usually a type of political) is very disproportionate to the algorithms of users in specific locations (including swing states). They can ensure that the content favors one side a lot more in selected locations. Now it seems a bunch of Trump allies are going to have this data & control the algorithm. I’m sure this will be totally fine.