In a significant development concluding years of regulatory and government scrutiny, the United States and China have authorized the sale of TikTok's US business to a consortium predominantly comprised of American investors. This consortium is led by technology giant Oracle Corporation (NYSE: ORCL) and private equity firm Silverlake. The approval by both governments addresses longstanding national security concerns about the ownership and operational control of the popular social media platform within the US jurisdiction.
Following extensive negotiations, the finalized transaction is scheduled to close within the current week, according to sources familiar with the matter who disclosed details to Semafor. Post-closing, ByteDance, TikTok’s Chinese parent company, will hold slightly less than a 20% equity interest in the US TikTok entity, marking a reduced role from its previous full ownership.
The ownership stakes allocated to key consortium members have been delineated to include Oracle, Silverlake, and MGX, the latter being a state-backed investment fund based in the United Arab Emirates with a strategic focus on artificial intelligence technologies. Each of these entities will command a 15% share of the new US company. Additionally, investors such as Susquehanna International Group, Dragoneer Investment Group, and DFO, which serves as the family office for Michael Dell, have secured stakes in the business, diversifying the investment group further.
TikTok CEO Shou Chew had announced in December the execution of a binding agreement involving these investors, though he also noted at that time that necessary regulatory approvals were still pending as of the report by Semafor on Thursday.
This transaction is being completed in response to regulatory pressure originating from the Trump administration via an executive order that mandated the divestment of TikTok’s US assets by January 22, following a 120-day grace period on the enforcement of a federal ban. The Biden administration reaffirmed this directive in 2024 by enacting legislation requiring ByteDance to sell its American segment or face prohibition, underscoring the enduring nature of national security concerns related to data governance and user privacy.
US Vice President JD Vance indicated in September that the deal was valued at approximately $14 billion, though specific details about the purchase price have not been publicly released. Central to the negotiation's complexity was the management of TikTok’s proprietary algorithm, which constitutes the backbone of the platform's content delivery but also serves as a focal point of contention between the US and Chinese authorities.
Requests for comment made to representatives from the White House, Oracle, Silverlake, and the Chinese embassy have not yet received responses, signaling ongoing sensitivity around the announcement and its implications.
From a market perspective, shares of Oracle Corporation reflected positive momentum reflective of the deal news, trading up by over 3% at an approximate price of $179.25 at the time of report, based on data collated from Benzinga Pro.
This development holds significant implications for both corporate strategy and geopolitical governance around technology firms with global reach. The divestiture represents unprecedented cooperation between two of the world’s leading economies to resolve conflicts tied to data security, ownership transparency, and consumer protection. By reorganizing TikTok’s US operations under a more internationally diversified ownership with strong American leadership, regulators aim to mitigate risks associated with foreign access to sensitive user data.
The transaction also exemplifies the increasing role of strategic investments from sovereign governments, as indicated by the participation of MGX, which targets cutting-edge AI ventures. This forms part of a broader trend whereby innovation-centric funds engage in high-profile acquisitions that bear potential economic and security ramifications.
When concluded, the agreement will mark a historical transition for TikTok in the US, balancing concerns over data privacy and national interest with the platform's established user presence. For shareholders, operational teams, and users alike, the structural changes signal a new chapter for the company’s American footprint.
While the deal addresses much of the political and regulatory uncertainty that has surrounded TikTok’s US business for several years, some aspects, such as how intellectual property and algorithmic control will be managed going forward, remain to be clarified through ongoing regulatory oversight.
Ultimately, this transaction crystallizes a complex intersection of technology, geopolitics, and investment dynamics, with repercussions that are likely to extend beyond TikTok to other global technology enterprises navigating similar national security concerns.