TikTok Sells U.S. Operations to Oracle and MGX Consortium

TikTok has reached an agreement to sell its U.S. operations to a consortium including Oracle, private equity firm Silver Lake, and UAE's MGX fund, in a move aimed at ensuring the app's continued operation within the American market, according to media reports.

The deal is expected to be finalized on January 22, as per an internal memo obtained by media, where TikTok CEO Shou Zi Chew confirmed that the parent company ByteDance has signed binding agreements with the three investors.

New Ownership Structure

Under the agreement, a new joint entity will be established to manage TikTok's operations in the U.S., with the new investors owning 50% of the company, split equally among Oracle, Silver Lake, and MGX at 15% each. Meanwhile, affiliates of existing investors in ByteDance will retain 30.1%, while the parent company will hold 19.9%.

MGX is a sovereign wealth fund specializing in artificial intelligence investments, established with support from the Abu Dhabi government to fund future foundational technologies.

Independent Management and U.S. Governance

Shou Zi Chew clarified that the new U.S. entity will operate as a fully independent body, with direct authority over user data protection, algorithm security, content moderation policies, and software safety.

A new board of directors will be formed with seven members, a majority of whom will be American, and will be subject to clear commitments regarding data protection and U.S. national security.

Data and Algorithms

According to the memo, TikTok user data in the U.S. will be stored locally through Oracle-managed systems, while the content recommendation algorithm will be retrained using only U.S. user data to ensure no external influences or interventions.

The new U.S. entity will also have full oversight of content management policies within the United States.

Background of the Deal

This move comes after the U.S. Congress passed a law last year requiring TikTok to be sold to an American entity, amid concerns regarding the potential access of Chinese authorities to user data through parent company ByteDance.

Thus, the deal puts an end to months of speculation regarding the platform's future in the United States and the identity of the investors who would manage it.