atisusanti
According to the internal memo circulated by Mr. Chew, the deal is slated to officially close on January 22, bringing an end to years of intense pressure from Washington to compel ByteDance to divest its US operations. This agreement is understood to be a refined iteration of a preliminary deal that was initially unveiled in September, when then-President Donald Trump intervened to delay the enforcement of a law that threatened to ban the app outright unless its ownership was transferred. TikTok’s leadership emphasized in their communication that this arrangement will ensure that "over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community," underscoring the platform’s significant cultural and economic footprint in the United States.
Under the intricate terms of the agreement, ByteDance will retain a minority stake of 19.9% in the newly established US entity. The remaining equity will be distributed among the key investors, with Oracle, Silver Lake, and MGX each holding 15% of the joint venture. An additional 30.1% will be held by affiliates of existing ByteDance investors, further diversifying the ownership structure. A crucial element of this arrangement, as previously indicated by the White House, involves Oracle licensing TikTok’s proprietary recommendation algorithm. This move is intended to address concerns about data security and potential foreign government influence. Oracle, co-founded by prominent Trump supporter Larry Ellison, has been positioned as a central player in safeguarding the platform’s operations within the US.
The path to this agreement has been fraught with delays and political maneuvering, reflecting the complex geopolitical landscape. The current situation traces its roots back to April 2024, during the Biden administration, when the US Congress passed legislation mandating the sale of TikTok’s US operations due to national security concerns, with an initial deadline of January 20, 2025. This deadline, however, was subject to multiple extensions under the Trump administration, which actively pursued a deal aimed at transferring ownership. In a notable public statement in September, then-President Trump revealed that he had engaged in a phone conversation with Chinese President Xi Jinping, who reportedly gave his tacit approval for the structural framework of the deal.
However, the platform’s future remained shrouded in uncertainty even after a face-to-face meeting between the two leaders in October. The ongoing trade tensions and broader diplomatic friction between the United States and China continued to cast a shadow over TikTok’s fate. Alvin Graylin, a lecturer at the Massachusetts Institute of Technology, provided an insightful perspective, stating, "TikTok has become a bargaining chip in the wider US-China relationship." He further elaborated, "With recent softening tensions, Beijing’s sign-off on the structure and algorithm licensing now looks less like capitulation and more like calibrated de-escalation, letting both capitals claim a win at home." This interpretation suggests a strategic move by Beijing to de-escalate a contentious issue while maintaining leverage.
When approached for comment, the White House directed inquiries to TikTok. Both Oracle and Silver Lake declined to provide statements on the matter. The BBC has reached out to MGX for their perspective. The agreement has not been without its critics, notably Senate Democrat Ron Wyden of Oregon, who expressed skepticism regarding its efficacy in protecting American user privacy. Senator Wyden argued that the deal would "not do a thing to protect the privacy of American user" and expressed doubts about whether TikTok’s algorithm would truly be placed in "safer hands." He had previously opposed the 2024 legislation and was among the lawmakers who advocated for extending the TikTok deadline in January, seeking additional time for Congress to develop comprehensive measures to mitigate perceived threats from China.
The prospect of new investors has also elicited cautious responses from some TikTok users. Tiffany Cianci, a small business owner with a substantial following of over 300,000 users and nearly four million likes on the platform, voiced her hopes that the incoming investors would preserve the user experience that has been beneficial for entrepreneurs like herself. "I hope small business owners are protected," she stated, emphasizing the platform’s vital role in her marketing strategy. TikTok has reported that more than seven million small businesses utilize the platform for marketing their products and services in the US. Ms. Cianci added, "I reserve judgment on whether or not we have saved the app for those small businesses," highlighting the uncertainty surrounding the long-term impact of the deal. She further explained her preference for TikTok over competitors like Meta, citing more favorable profit-sharing terms. Over the past year, Ms. Cianci has been an active participant in organizing protests in Washington and on TikTok, advocating for the preservation of the app. Her dedication underscores the deep engagement and reliance that many small businesses have placed on TikTok as a critical tool for growth and outreach. The success of the joint venture will, in part, be measured by its ability to maintain and foster this vital ecosystem of entrepreneurs.
Nana Banana
George Anjay
