US prospective buyers for TikTok revealed by media
The U.S. Supreme Court has upheld the lawfulness of the social media ban in the country, marking a significant development in the ongoing saga surrounding TikTok. However, a recent deal has saved the popular social media platform from a potential U.S. ban.
The deal, announced by then-U.S. President Donald Trump on September 15, 2020, during two-day China-U.S. talks in Madrid, will see American investors owning approximately 80% of the shares in the new TikTok entity. This comes after Trump's earlier statement that the condition for TikTok to continue operating in the U.S. was a 50% sale to an American side.
Oracle will continue to provide cloud services for TikTok as part of the deal. ByteDance, the Chinese parent company of TikTok, will license the technology underlying TikTok's recommendation algorithms. As a result, ByteDance's stake in TikTok will fall below 20%.
Three U.S. companies - Oracle, Susquehanna International Group, and General Atlantic - will have a stake in the new TikTok U.S. entity, with KKR being the third American investor group to join the venture. The new company will have a board of directors, with a majority of seats held by Americans. One seat on the board will be filled by a U.S. government appointee.
The initial deadline for ByteDance to conclude a deal to sell TikTok was set for January 19, 2025, or risk a U.S. ban. However, this deadline has been extended on four occasions, with the latest extension given on September 16, 2020, when Donald Trump signed an executive order delaying TikTok's U.S. ban for 90 days, until December 16.
A U.S. version of TikTok will be created as part of the deal. The talks concerning the social media platform were clarified by then-U.S. Treasury Secretary Steven Mnuchin.
In a notable development, a phone call between U.S. President Donald Trump and Chinese President Xi Jinping is scheduled for September 19. This call may provide further insights into the ongoing relations between the two countries and the future of TikTok in the U.S.
The deal marks a significant shift in the power dynamics of TikTok, with American investors and companies taking a majority stake in the social media platform. The future of TikTok in the U.S. now appears to be secure, at least for the foreseeable future. However, the ongoing tensions between the U.S. and China may continue to impact the platform's operations and ownership structure.
This article was updated in April 2024, following the signing of a law by U.S. President Joe Biden. The exact details of the updated law are yet to be fully understood, but it is expected to have implications for the ownership and operations of TikTok in the U.S.
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