The popular short video app owned by ByteDance has signed an agreement to sell its U.S. business to a U.S.-led group including software giant Oracle
After nearly six years of legal and political wrangling, China's ByteDance has signed an agreement to sell the U.S. operations of its TikTok short-video division to a business consortium dominated by American entities, the New York Times reported on Thursday. The move aims to resolve long-standing threats of a ban of the service in the U.S. over national security concerns.
Under the agreement, the newly formed U.S. TikTok entity will be more than 80% owned by U.S. and other non-Chinese investors, addressing Washington's main concern. Participants include software giant Oracle (NYSE:ORCL), private equity firm Silver Lake, and MGX, a state-owned Emirati investment firm focused on AI. The investor group also includes the personal investment vehicle of Michael Dell, founder of Dell Technologies (NYSE:DELL), along with several other investment firms. Adam Presser, TikTok's head of operations, will serve as chief executive of the U.S. TikTok business.
News outlet Semafor further cited people familiar with the matter saying the transaction is expected to be completed this week. Under the final ownership structure, Oracle, Silver Lake and MGX will each hold about 15% of the U.S. TikTok entity, while ByteDance's ownership will be reduced to just under 20%. Other investors include Susquehanna and U.S. investment firm Dragoneer.
Completion of the deal would mark a tentative end to a protracted controversy and remove a key friction point in U.S.-China relations.
The forced separation of TikTok's U.S. operation from China stems from U.S. national security concerns tracing back to 2019. U.S. officials and lawmakers have repeatedly argued that under China's National Intelligence Law and other regulations, Chinese companies could be compelled to provide data or technical assistance to Beijing, leaving TikTok vulnerable to potential surveillance or influence operations.
In 2024, the administration of then-President Joe Biden enacted legislation requiring ByteDance to divest TikTok's U.S. business by a set deadline or face a nationwide ban. As the deadline approached, TikTok briefly went dark in U.S. for 14 hours, unsettling users and markets alike. After returning to office, President Donald Trump used executive orders to repeatedly delay enforcement of the ban, buying time for negotiations. The most recent extension is set to expire on Jan. 22.
It remains unclear how much ByteDance will ultimately receive from the sale. U.S. Vice President JD Vance said last September that the deal would value TikTok's U.S. business at around $14 billion.
The fate of TikTok's core algorithm also remains under scrutiny. Under the current arrangement, ByteDance will retain ownership of the algorithm and license it to the new U.S. entity.
In a memo to employees last December, TikTok chief executive Shou Chew said the new independent company would oversee data protection, content moderation and algorithm security, and would be governed by a seven-member board with a majority of Americans. Chew will retain a seat on the board.
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