TikTok deal finalizes as ByteDance divests US operations to American investors

Here's what you should know about the US TikTok deal

TikTok, owned by the Chinese company ByteDance, has been at the center of controversy in the U.S. for years now due to concerns about user data potentially being accessed by the Chinese government. As a result, U.S. users have often found themselves caught in the middle of this tension. Last year, the app experienced a temporary outage in the U.S. that left millions of users in suspense before it was quickly restored. TikTok returned to the App Store and Google Play Store in February. A number of investors competed to purchase the app, and after Trump extended the TikTok ban deadline for the fourth time, the battle is finally over. As of December, TikTok officially signed a deal to divest a portion of its U.S. entity to a group of American investors. And now the deal is set to close this week, Semafor reported on Thursday. This comes nearly three months after President Donald Trump signed an executive order that approves the sale of TikTok's U.S. operations to an American investor group. A week prior, President Trump announced that President Xi Jinping of China had given his approval of a TikTok deal, which would allow a consortium of U.S. investors to control the platform. ByteDance stated publicly that it would ensure the platform remains available to American users. Who owns TikTok in the U.S.? According to a memo viewed by TechCrunch, the investor group consists of Oracle, private equity firm Silver Lake, and investment firm MGX. Collectively, they will hold 45% of the U.S. operation, with ByteDance keeping nearly a 20% stake. Axios first reported the news, citing sources who estimate TikTok U.S. is valued at approximately $14 billion -- a figure also mentioned by Vice President JD Vance. In September, a report indicated that a "framework" deal was established between the U.S. and China, with a consortium of investors -- including Oracle, Silver Lake, and Andreessen Horowitz -- overseeing TikTok's U.S. operations. These investors were expected to hold an 80% stake, and the remaining shares would belong to Chinese stakeholders. The newly formed "TikTok USDS Joint Venture LLC" will oversee the app's operations, including data protection, algorithm security, content moderation, and software assurance. Oracle will serve as the trusted security partner, responsible for auditing and ensuring compliance with National Security Terms, according to the memo. The company already provides cloud services for TikTok and manages user data in the U.S. Notably, Oracle previously made a bid for TikTok back in 2020. A White House official previously said Oracle would replicate and secure a new U.S. version of the algorithm, and the U.S.-based TikTok owners could lease the algorithm from ByteDance, which Oracle will then retrain. ByteDance will not have access to information about TikTok's U.S. users or any influence over the U.S. algorithm. The deal was scheduled to close on January 22, 2026, so hopefully we'll learn more soon. What users in the U.S. should know Reports from Bloomberg indicate that when the deal is finalized, the TikTok app will be discontinued in the U.S. and users will need to transition to a new platform. However, the specifics of this platform remain largely unclear, including its features and how it will differ from the original app. How did we get here? To fully understand this high-stakes drama, we'll first revisit the timeline of TikTok's tumultuous relationship with the U.S. government, which resulted in various legal battles and negotiations. The drama first began in August 2020, when Trump signed an executive order to ban transactions with parent company ByteDance. A month later, Trump's administration sought to force a sale of TikTok's U.S. operations to a U.S.-based company. The leading contenders included Microsoft, Oracle, and Walmart. However, a U.S. judge temporarily blocked Trump's executive order, allowing TikTok to continue operating while the legal battle unfolded. Things began to progress even more last year following the transition to the Biden administration. After the Senate passed the bill against TikTok, President Joe Biden signed it. In response, TikTok sued the U.S. government, challenging the constitutionality of the ban and arguing the app and its American users were having their First Amendment rights violated. The company has consistently denied that it poses a security threat, asserting that its data stored in the U.S. complies with all local laws. Fast-forward to 2024: Trump had a change of heart since his first term and is trying to achieve a 50-50 ownership arrangement between ByteDance and a U.S. company. There have been several contenders, including The People's Bid for TikTok , a consortium organized by Project Liberty founder Frank McCourt. This group has the support of investment firm Guggenheim Securities and the law firm Kirkland & Ellis. Supporters include Reddit co-founder Alexis Ohanian, TV personality and investor Kevin O'Leary, inventor of the World Wide Web Tim Berners-Lee, and senior research scientist David Clark. Another group, called the American Investor Consortium, is led by Employer.com founder Jesse Tinsley and includes Roblox co-founder David Baszucki, Anchorage Digital co-founder Nathan McCauley, and famous YouTuber MrBeast. Others in the running included Amazon, AppLovin, Microsoft, Perplexity AI, Rumble, Walmart, Zoop, former Activision CEO Bobby Kotick, and former U.S. Treasury Secretary Steven Mnuchin. The story has been updated after publication.

TikTok US venture to collect precise user location data

TikTok's new US joint venture has made changes to its privacy policy that include expanding the type of location data the company can collect from its 200 million American users. The new policy was published after investors closed a deal with TikTok's Chinese owner ByteDance on Thursday to run the popular short-form video app's business in the US. The new joint venture said in its updated privacy terms that it may now "collect precise location data, depending on your settings" - a change from the previous policy which allowed for the collection of "approximate" location data. TikTok did not immediately respond to the BBC's request for comment on the change. The company policy added that the sensitive personal information would be processed "in accordance with applicable law" and that users can turn off location services in their device settings at any time. Even before the new venture was established, TikTok collected location information based on a user's SIM card or IP address, or both. But it stopped short of collecting even approximate GPS information from American users operating the most updated version of the app, according to a 2024 version of its privacy policy. The new American TikTok joint venture is also extending its permissions for gathering information about users interactions with TikTok's artificial intelligence (AI) tools. This includes prompts and questions submitted by users, as well as information about how, when, and where AI content was prompted or created. TikTok USDS Joint Venture LLC is comprised of three managing investors including cloud computing giant Oracle, which is investing heavily in AI infrastructure and has taken on significant debt to finance its ambitions in the burgeoning space. Oracle is chaired by Larry Ellison, a Republican megadonor and longtime ally of US President Donald Trump, whose administration helped broker the US TikTok deal. The agreement follows years of tussling between Washington and Beijing that began in Trump's first presidential term, when he tried unsuccessfully to ban the app over national security concerns. In 2024, the US passed a law that required the platform to be banned in the US by January 2025 if ByteDance failed to sell its US operations to American investors. Trump repeatedly postponed the enforcement of legislation until the joint venture was finalised this week. The 2024 law was prompted in part by concerns about the possibility that Beijing might access the data of TikTok's American users. In a statement onThursday, the new joint venture said its mandate was "to secure U.S. user data, apps and the algorithm through comprehensive data privacy and cybersecurity measures". Oracle will oversee the retraining of TikTok's powerful content recommendation algorithm on existing American user data, the joint venture said in its statement, adding that the algorithm "will be secured in Oracle's U.S. cloud environment." ByteDance retains a minority stake just shy of 20% in the joint venture. Other managing investors include the US tech investment firm Silver Lake and Abu-Dhabi state-owned investment fund MGX, which has done business with the Trump family's crypto venture World Liberty Financial. On Friday, Republican Representative John Moolenaar, who chairs the House Select Committee on China, expressed concern about ByteDance's ongoing involvement in TikTok's US operations. "Does this deal ensure China does not have influence over the algorithm? Can the parties involved assure Americans their data is secure?" he said in a statement. "Those are questions that need to be answered as the Select Committee does oversight of this deal." Sign up for our Tech Decoded newsletter to follow the world's top tech stories and trends. Outside the UK? Sign up here.

TikTok closes deal to split US app from global business: What to know

TikTok announced on Thursday that it has finalised a deal that will allow the hugely popular short-video app to continue operating in the US. The deal comes after a years-long tussle between Washington and Beijing that began in Trump's first term in the White House when he tried unsuccessfully to ban the app over national security concerns. The platform was due to be banned in the US in January 2025 if its Chinese owner, ByteDance, failed to sell its US operations to American investors. But US President Donald Trump repeatedly postponed the enforcement of legislation to take down the app. That deal has now closed, according to TikTok. But what will this mean for the 200 million Americans on the app? Here's what to know. For years Washington has been pressuring TikTok to sell its US operations, citing national security concerns over its Chinese owner ByteDance. Lawmakers had expressed fears that Beijing could force the firm to hand over US users' data. Both TikTok and ByteDance have consistently denied the claim. The idea of a TikTok ban, first floated by Trump during his first term in 2020, gained momentum under Joe Biden's presidency. In 2024, Biden signed a law demanding that ByteDance sell TikTok or face a ban in the US. A legal battle ensued between ByteDance and the US government, and in January last year the app went offline for US users for 12 to 14 hours. That temporary blackout was restored after Trump, then the president-elect, pledged to reverse the ban. Last September, Trump announced that he had reached a deal with China to keep the app running in the US. And in December, binding agreements were signed with American and global investors to operate TikTok's business in the US, according to a memo from its chief executive Shou Zi Chew. More details of this deal were outlined in TikTok's latest announcement. Under the agreement, a new business called TikTok USDS Joint Venture LLC will secure US user data, apps and algorithms through data privacy and cybersecurity measures. Trump has weighed in on the deal, writing on social media that he was "so happy to have helped in saving TikTok". The BBC has contacted the White House and the China's embassy in Washington for comment. TikTok says the new joint venture will operate as an independent entity governed by a seven-member, majority-American board of directors. Adam Presser, formerly of WarnerMedia, was appointed as the chief executive of the joint venture. There are three managing investors for TikTok's US operations, each holding a 15% stake: * Oracle - the cloud computing giant chaired by Larry Ellison, a Republican megadonor and longtime Trump ally * Silver Lake - a US tech investment firm that says it holds approximately $116bn in assets (£85.9bn) * MGX - an Emirati investor in AI and technology Oracle will be responsible for securing the data of TikTok's American users and oversee the retraining of the app's powerful content recommendation algorithm. ByteDance will retain a 19.9% stake in the business. The remaining 35.1% of the company is owned by a group of companies including the family office of tech executive Michael Dell - another Trump supporter - and Vastmere Strategic Investments, an affiliate of Susquehanna International Group. Susquehanna was co-founded by Trump ally Jeff Yass, whose personal share in TikTok's owner ByteDance was roughly 7% as of last year. Its managing director, Mark Dooley, will also be a member of the new firm's board of directors. The board will also include TikTok's global boss Shou Zi Chew as well as executives from Oracle, Silver Lake and MGX. This question is at the heart of the tussle over TikTok's US operations. Its algorithm is the "secret sauce" that has driven the app's huge popularity. A former social media executive previously told the BBC that other companies have tried to re-create the algorithm, from Instagram's Reels to YouTube's Shorts, but they're just not as good. "Generally, the one who introduces the technology just knows how to do it better." ByteDance had initially refused to part with its prized formula - a stance backed by the Chinese government. But last September, Beijing's top cybersecurity regulator signalled that Beijing could allow ByteDance to license the algorithm to a US company owner. According to the deal, the algorithm will be retrained on US user data only, which will be protected to meet American regulations. The algorithm will be "secured in Oracle's US cloud environment", TikTok said. The impact of this shift will soon be felt by the millions of American TikTok users. Experts say this might mean a slower, lighter app that operates differently from the global version. The algorithm might also not recommend content as successfully as the current platform. Additional reporting by Koh Ewe