"TikTok" Sells Its U.S. Operations to a Coalition Including UAE's "MGX"

SadaNews - TikTok has struck a deal to sell its entity in the United States to a joint venture controlled by a group of American investors, according to an internal memo indicating that the agreement is set to be finalized on January 22.

According to Bloomberg, Oracle, Silver Lake, and Abu Dhabi-based "MGX" will collectively own 45% of the new American entity, divided equally. Investors associated with ByteDance will hold nearly one-third of the company, while the Chinese parent company, ByteDance, will retain 19.9% of the shares.

CEO Shou Chew stated: "Upon completion of the deal, the U.S. joint venture, based on the current U.S. TikTok data security organization, will operate as an independent entity with the authority of American data protection, algorithm security, content moderation, and software quality assurance," as reported by Bloomberg from an internal memo.

Meanwhile, Shou noted that "the American entities affiliated with global TikTok will manage global product interoperability and some business activities, including e-commerce, advertising, and marketing."

Washington Arranged the Sale

After more than a year of negotiations, Washington arranged the sale of the American arm of the popular video app owned by ByteDance to a coalition of investors. If the deal is completed, it will eliminate a chronic issue in relations between Beijing and Washington and will indicate progress in broader talks.

The desirable algorithms for ByteDance are central to TikTok's business. Under the proposed deal from Washington, ByteDance will license its AI-based recommendation technology to a newly established American TikTok entity, which will use the current algorithm to retrain a new system secured by Oracle, TikTok’s cloud partner.

Former U.S. President Donald Trump announced some details related to the proposed arrangement, which was imposed based on national security considerations under a law signed last year during Joe Biden's administration.

U.S. officials have expressed concerns that TikTok is owned by a Chinese company, fearing that Beijing could use the app to gather data on American citizens or promote specific narratives to Americans through the app’s recommendation algorithm.

Under the law, the initial deadline for the "sell or ban" rule was last January, but Trump extended this deadline several times since returning to office. Another extension deadline expires in January 2026.