Divestment Deal Poised to Pass
On September 22, President Donald Trump announced that a deal between TikTok’s owner ByteDance and the American government would be reached this week in order to keep the app in the U.S. after delaying legislation from earlier in the year that would have banned the social media app. In order for the app to continue operating in America, the U.S. government declared that its American operations must be divested from its Chinese owner.
Terms and Conditions
The terms of the deal would involve TikTok US, an American version of the app, being controlled by both its existing and new American and global investors, with its original parent company ByteDance owning less than 20% of TikTok US. The app would be operated by tech company Oracle, who would store American user data on the American cloud. The executive order that would put the deal into place would include a 120-day enforcement pause, the latest pause on the original January 2025 shutdown notice on the app issued by the U.S. government.
Proposed New Owners
A final slate of investors is not finalized, but is set to include private equity firm Silver Lake. According to Trump, it would also include Fox News CEO Lachlan Murdoch, Oracle CEO and 2nd richest person in the world Larry Ellison, and Michael Dell of Dell Technologies.
TikTok’s Future in the U.S.
Washington D.C.’s Chinese embassy stated that it would “be happy to see productive commercial negotiations in keeping with market rules lead to a solution that complies with China’s laws and regulations and takes into account the interests of both sides.” The U.S. government won’t take a board seat or receive direct shares in TikTok US, but as of September 23 it is unclear if it will receive payment as a condition of approval for the new deal. It is also unclear how Oracle’s new control of the platform, and the new slate of investors, may change how content is moderated on the app, how data is stored other than the location of its cloud servers, and the new directions and features it may take in the future.
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