TikTok Decides to Sell Its U.S. Unit to American Investors

SadaNews Economy - The company "ByteDance", the owner of the "TikTok" application, has signed a deal to sell its unit in the United States to a joint venture controlled by American investors, according to a memo from TikTok's CEO that was reviewed by Reuters.

The deal is set to be completed on January 22, which will mark the end of years of efforts to force the Chinese parent company ByteDance to divest its business in the United States amid national security concerns.

Bloomberg and Axios reported, citing an internal memo, that Shou Chew, the CEO of TikTok, informed his employees that the social media company and its Chinese owner "ByteDance" agreed to the new entity involving major investments from "Oracle", "Silver Lake", and "M.G.X", based in Abu Dhabi.

Larry Ellison, the founder and CEO of Oracle, is one of the longtime allies of U.S. President Donald Trump. Chew explained to employees that "ByteDance" will retain about 20% of the new entity, which is the maximum percentage allowed for a Chinese company under law.

This arrangement comes in response to a law passed during the administration of former President Joe Biden which forces "ByteDance" to sell the operations of the TikTok application in the United States or face the risk of being banned in its largest market. American officials, including Trump himself during his first term, warned against China's use of TikTok to collect data on Americans or exert influence through its sophisticated algorithms.

Chew stated in the memo reported by Bloomberg, "Upon completion of the deal, the U.S. joint venture (...) will operate as an independent entity under the authority of U.S. data protection, algorithm security, and content moderation."). Trump had mentioned in September the name of Ellison, the head of Oracle and one of the richest men in the world, as a key investor in this agreement.

Ellison has returned to the spotlight through his dealings with Trump, who supported his old friend's entry into major partnerships in the field of artificial intelligence with the company "OpenAI". Ellison also recently financed his son David's acquisition of "Paramount" and is currently engaged in a battle with Netflix to acquire "Warner Brothers".