Oracle, Silver Lake, and MGX Join the Deal
Sale to Be Finalized by January 22 Next Year
Oracle to Oversee Security
On December 18 (local time), The New York Times (NYT), CNBC, and other outlets reported that TikTok, the video service operated by China's ByteDance, has signed an agreement to sell its U.S. business unit stake to a joint venture led by American investors, including Oracle.
On the same day, TikTok CEO Shou Zi Chew revealed in an internal memo to employees that ByteDance, TikTok's parent company, had signed contracts with three major new investors.
Oracle, Silver Lake, and MGX from the United Arab Emirates (UAE) will jointly hold a 45% stake in TikTok's U.S. entity, which will be operated as "TikTok USDS Joint Venture LLC." Existing ByteDance investor affiliates will hold 30.1%, while ByteDance itself will retain a 19.9% stake.
This largely aligns with what parties involved in the TikTok sale negotiations mentioned last September. However, according to the NYT, it remains unclear who will acquire the remaining 5% stake.
CEO Chew explained that the new TikTok joint venture will have a majority stake owned by U.S. investors, will be managed by a new board of seven American directors, and will comply with provisions to protect American data and U.S. national security.
The sale agreement is expected to be finalized by January 22 of next year, just one day before the January 23 deadline for TikTok's U.S. service suspension. Last September, President Trump issued an executive order approving the sale of TikTok's U.S. business, postponing the enforcement of the national security law against TikTok for 120 days.
CEO Chew stated that the joint venture, as an independent entity, will be solely responsible for the security of data, algorithms, content, and software within the U.S., and will have exclusive authority and responsibility for protecting American users.
Under the joint venture structure, U.S. user data will be stored in cloud data centers operated by Oracle within the United States. Additionally, TikTok's core competitive advantage-its recommendation algorithm-will be retrained based on U.S. user data to further enhance the security and integrity of content within the application.
CEO Chew also said, "A trusted security partner will be responsible for auditing and verifying compliance with the agreed-upon national security conditions, and once the transaction is completed, Oracle will serve as that trusted security partner."
As national security concerns have been raised over TikTok, a Chinese company, collecting Americans' personal information and potentially influencing public opinion, former President Joe Biden signed the so-called "TikTok Ban Act" last year. However, President Trump, on his first day in office, issued an executive order deferring the enforcement of the ban, and subsequently extended the sale deadline in April, June, and September, seeking new ownership for TikTok.
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