After a long period of uncertainty, TikTok has now agreed a deal which gives up control of the social media platform in the U.S. TikTok’s operation in the U.S. will now be operated by a group dominated by American investors led by the software company Oracle.
Why has TikTok in the U.S. been sold?
In 2024, the U.S. Congress passed a law which banned TikTok from operating in the U.S. unless it was sold to American owners. This was because American politicians were concerned that TikTok’s parent company, ByteDance, was linked to the Chinese government. TikTok was scheduled to shut down in January this year. However, President Trump signed several executive orders which allowed TikTok to keep operating until a deal could be put together. Now this has finally been resolved.
Who controls TikTok now?
ByteDance hasn’t given up control of TikTok completely. The company still owns around 20% of TikTok. In addition, around 35% of TikTok is owned by other ByteDance investors. However, 45% of TikTok is now controlled by an American-led consortium. These investors include the Oracle, as well as a private equity company called Silver Lake. The consortium also includes an investment company called MGX, which is backed by the United Arab Emirates government.
What does this mean for TikTok?
The sale only applies to TikTok’s operation in the U.S. As such it only affects around 10% of the app’s 2 billion users around the world. However, it means that TikTok’s data and algorithm in the U.S. will be overseen by the new American consortium. Despite this, ByteDance still owns the algorithm, even in the U.S.
For the rest of the world, nothing has changed. In the U.S. a board of directors with seven members will control the new company. Interestingly, content-moderation rules will not be set by the new investors.
What we think
TikTok users in the U.S. will be relieved that the uncertainty around the future of the platform has finally been resolved. With the new consortium in place, the risk of TikTok being banned seems to have gone away for good. However, some Americans will still have concerns. Oracle is run by the billionaire Larry Ellison, who is an ardent supporter of President Trump. Ellison is also a backer of Paramount Skydance and his son is the CEO of the company.
Additionally, Paramount Skydance is currently bidding to take over Warner Bros Discovery. This raises questions over the potential for one individual to have control over the entertainment and social media available to the U.S. public.
