It took more than a year to make the deal but it’s finally done. Byte Dance has signed off on an agreement to sell US Tik Tok to a group of American and UAE investors.
The deal, facilitated by the Trump administration, means the U.S. version of TikTok will become majority-owned by a group of investors that includes the American tech giant Oracle, the California-based private equity fund Silver Lake and the United Arab Emirates investment firm MGX…
ByteDance will keep a 19.9% stake in the U.S. operation, TikTok said in a December memo…
Americans make up TikTok’s largest user and creator bases, with more than 150 million active users in the country.
As you probably remember, the app was supposed to be banned about a year ago if China refused to sell, but President Trump kept extending the deadline to allow for more time to make a deal.
Such a ban almost came to fruition just over a year ago, when the Protecting Americans from Foreign Adversary Controlled Applications Act was supposed to take effect. The bipartisan bill, which was upheld by the Supreme Court, required ByteDance to sell the platform to an American company or face a ban…
But aside from its briefly going dark on the eve of the ban, TikTok has remained consistently available to its American users as Trump repeatedly issued executive orders to delay the ban. He extended TikTok’s shutdown deadline four times before he announced a tentative deal between Washington and Beijing in September.
The latest extension of the deadline was set to expire tomorrow so this deal came just in time. The outlines of the plan have been circulating for months. Most of the initial outrage from fans of the app have died down over the past year.
What initially drove the passage of the law requiring Byte Dance to sell was concern that China could use the app to influence or gather data on the public. Today, before the ink is even dry, the NY Times is raising the prospect that the new company might be too friendly to President Trump.
Several of the new investors have ties to Mr. Trump, raising concerns for some TikTok users that the app could start showing more content aligned with the president’s views or the positions of the U.S. government.
Larry Ellison, Oracle’s billionaire founder, has a close relationship with Mr. Trump, and lobbied the president directly on behalf of his son David Ellison’s bid to buy Warner Bros. Discovery. MGX has done business with the Trump family’s crypto firm, World Liberty Financial.
Anupam Chander, a law and technology professor at Georgetown University, said that the deal allows for “more theoretical room for one side’s views to get a greater airing.”
“My worry all along is that we may have traded fears of foreign propaganda for the reality of domestic propaganda,” he added.
We’ll see what happens but there’s no evidence now that anything like this is going to happen. In fact, the deal does not transfer the company’s algorithm to the new venture. Instead Byte Dance is licensing that to the US TikTok. Does that mean China is still in control of what is being shown to US users? What ability does the new company have to control the Chinese algorithm? It’s not clear from the initial stories how it will work.
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