It’s being reported that TikTok has signed a deal to spin-off its U.S. operations to a group controlled by mostly American investors, including Oracle.
According to the agreement, TikTok's U.S. algorithm will be retrained with only Americans' data. Content moderation rules around what is permitted and what is not will be set by the new investor-controlled entity, NPR reports.
However, the underlying algorithm will still be owned by ByteDance, with the blessing of American auditors, according to an internal TikTok memo reviewed by NPR and two sources familiar with the deal who were not authorized to speak publicly.
Under the terms of the sale, half of the new entity that will control the American version of TikTok will be owned by a consortium of investors including Oracle, private equity firm Silver Lake, and United Arab Emirates state-backed investment firm MGX. Those three will control 45% of the new U.S. TikTok entity, NPR reported.
About a third of the newly formed TikTok operation will be held by existing investors of ByteDance, the Chinese parent company of the video app. And around 20% will be kept by ByteDance.
A seven-member board of directors, most being American, will oversee the new entity, according to reports.
The deal caps more than five years of mounting pressure from Washington, where bipartisan concerns about TikTok's ties to China prompted Congress to pass a law in 2024 that would have banned the app unless it was sold.