TikTok’s Chinese parent company, ByteDance, has officially been taken over by an American venture to operate the popular video app in the United States, transferring majority control to a group of non-Chinese investors.
According to reporting by The New York Times, the deal announced Thursday is part of an effort to comply with a 2024 federal law that aimed to separate TikTok from ByteDance to address national security concerns over the app’s ties to Beijing.
Under the new arrangement, non-Chinese investors will own about 80% of the American venture, while ByteDance will retain a 19.9% stake, the legal maximum allowed under the law.
The US consortium will license TikTok’s recommendation algorithm
The new American venture will license the app’s powerful recommendation algorithm from ByteDance and will possess the power to moderate content on the app. The new ownership group includes several companies with ties to one another and President Donald Trump.
Oracle, the cloud computing and database software company, has taken a 15% stake in the new entity. Oracle will oversee the security of Americans’ data and monitor changes and updates to TikTok’s recommendation technology. Kenneth Glueck, an executive vice president at Oracle, will have a seat on the new venture’s board.
U.S. reporting notes that Oracle’s executive chair, billionaire Larry Ellison, has frequently visited the White House and Mar-a-Lago. Furthermore, Oracle has been housing Americans’ TikTok data on its servers since 2022.
MGX holds 15% of the TikTok takeover
MGX, an Emirati investment company focusing on technology and artificial intelligence, also holds a 15% stake. MGX was founded by Mubadala, Abu Dhabi’s sovereign wealth fund, and G42, an Emirati AI company. David Scott, the firm’s chief strategy and safety officer, will also join the board.
MGX has previously intersected with President Trump’s business interests. According to reporting by The New York Times, MGX helped finance a US$100 billion initiative announced by Trump last January focused on building AI data centers.
Additionally, G42 has previously offloaded investments in Chinese companies, including ByteDance, following concerns raised by American spy agencies regarding security threats.
Silver Lake, an investment company based in Menlo Park, California, is the third major partner with a 15% stake. Silver Lake co-chief executive Egon Durban will sit on the new entity’s board. The firm has existing ties to the other partners, having invested in G42 since 2021 and collaborated with Oracle on data center infrastructure.
Other investors include the personal investment entity for Michael Dell, as well as affiliates of General Atlantic and Susquehanna. According to reporting by The New York Times, while ByteDance has reduced its ownership to comply with U.S. law, the Chinese tech company still owns the global TikTok brand.