TikTok transaction nearing completion, allowing U.S. to control its underlying algorithms, as per White House announcement
TikTok, the popular social media platform, briefly went dark in the United States on January 18, 2022, causing a stir among its 170 million US users. However, a significant development is on the horizon as a deal to sell a majority stake in TikTok's US operations to an American consortium led by Oracle, Andreessen Horowitz, and Silver Lake, is close to being signed.
The deal, which is expected to be finalised in the coming days, will see Americans holding six out of the seven seats on TikTok's board. This move is a result of President Trump's efforts to broker a deal, having granted four extensions to delay the shutdown of TikTok in the US.
The consortium taking over TikTok's US operations also includes private equity firm Silver Lake, venture capital firm Andreessen Horowitz, and investors such as Susquehanna International Group (SIG), General Atlantic, and KKR. Chinese investors from ByteDance, TikTok's parent company, will retain a minority stake of under 20 percent, specifically about 19.9 percent, while the consortium will hold around 80 percent of TikTok's US business.
The deal comes after a standstill in talks between the US and China due to tariffs imposed by Trump in April. However, with tariffs reduced and talks resumed, both leaders expressed interest in re-engaging on TikTok discussions.
The expected deal could pave the way for the first in-person meeting between Trump and Xi since Trump returned to office, which is expected to take place at the APEC Summit in South Korea next month.
Data and privacy for TikTok in the United States will be led by tech giant Oracle, addressing US national security concerns. The United States will also acquire control over TikTok's algorithm in the acquisition of its US operations.
It's worth noting that a significant portion of TikTok's US userbase consists of young people. According to Pew Research, this demographic has shown more support for the Republican presidential candidate in the 2024 election than in previous elections.
Key details still need to be ironed out, but the deal, if signed, could mark a significant shift in the ownership and management of TikTok in the US. Stay tuned for more updates as this story unfolds.
