TikTok, the popular social media platform known for its engaging video content, has entered into a definitive agreement to spin off its U.S. operations, which will be overseen by a newly formed entity controlled majority by American investors. This consortium is led by Oracle Corporation, a software giant headed by Larry Ellison, a prominent supporter of former President Donald Trump. The transaction aims to address ongoing concerns raised by Washington about potential national security risks tied to TikTok's Chinese parent company, ByteDance.
Under the terms of the agreement, the U.S. version of TikTok will operate under new ownership, with the platform's algorithm being retrained exclusively using data from American users to better protect their privacy. Moreover, content moderation policies — which determine what is allowed on the platform — will be established and enforced by the new American-led ownership group. Despite these operational changes, ByteDance will retain ownership of the underlying algorithm, though American-appointed auditors will monitor its activities, according to an internal memo reviewed by NPR and confirmed by two sources with knowledge of the deal who were not authorized to discuss it publicly.
Technology and law analyst Anupam Chander from Georgetown University noted, “With an American majority running the content moderation, concerns about foreign propaganda seem to have been alleviated. However, the U.S. entity’s approach to permissible speech might differ from TikTok’s global platform, potentially limiting speech allowed in other jurisdictions.”
The newly established U.S. TikTok entity will be owned partly by a consortium including Oracle, private equity firm Silver Lake, and the United Arab Emirates state-backed MGX investment firm. Together, these three investors will hold a 45% stake in the new company. Existing ByteDance investors will own approximately one-third of the new TikTok U.S. business, while ByteDance itself will retain about 20%. Oversight will be provided by a seven-member board of directors, predominantly composed of American nationals.
This deal culminates more than five years of escalating scrutiny by the U.S. government, which has expressed bipartisan concerns regarding TikTok’s links to China. These concerns prompted Congress to pass legislation in 2024 that effectively mandated a sale of TikTok’s U.S. operations to a domestic owner or face a ban on the app. The Supreme Court upheld this law in January, reinforcing the regulatory pressure facing TikTok. Despite this, enforcement was delayed through a series of executive actions.
Former Treasury official Jim Secreto, who worked on TikTok policies during the Biden administration, criticized the deal, stating that it falls short of the Congressional intent for a “clean break” from ByteDance. He described the arrangement as more akin to a franchise model where TikTok’s core technology remains tied to China, leaving unresolved national security concerns regarding covert access to U.S. user data and potential manipulation of the algorithm.
The White House refrained from commenting on the deal. Currently, TikTok has an estimated 2 billion users worldwide, with fewer than 10% based in the United States.
Following the establishment of this new U.S. entity, TikTok will effectively exist in two forms: one supervised and controlled by an American consortium with enhanced data security and content governance measures, and another operated entirely by ByteDance for global markets outside the United States.
The transaction also represents a strategic victory for Larry Ellison, who continues to expand his influence over various sectors of American media and entertainment. Ellison's involvement with Paramount Skydance, completed earlier this year, and his family’s activities within the media industry underscore this increasing footprint. Ellison’s son, David Ellison, leads Paramount Skydance as chairman and CEO and has launched a hostile takeover bid for Warner Bros. Discovery, a move endorsed by top Warner executives and concurrent with Netflix's competing bid.