Leaked Memo Reveals Why TikTok's New US Owners May Have Less Power Than Expected

TikTok has finalized a deal with new US owners including Oracle, MGX, and Silver Lake. However, these investors will not have significant control over key business areas, according to an internal memo. What Happened: TikTok has reached an agreement with Oracle, Abu Dhabi investment firm MGX, and private-equity firm Silver Lake for a joint-venture agreement. These new investors will focus on national security-related tasks, such as data management and algorithm training. However, TikTok’s current owner, ByteDance, will retain control over key business lines, including e-commerce and advertising. TikTok CEO Shou Chew has stated that the new investors will not be in control of core business lines like TikTok Shop or ad sales, but they may still participate in the profits of the business. “The US joint venture, built on the foundation of the current TikTok US Data Security (USDS) organization, will operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance, while TikTok global’s US entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing,” as quoted by Business Insider Chew wrote in the memo. Also Read: One in Five Americans Gets News From TikTok — Up From Just 3% In 2020 The deal, expected to close in late January, will give Oracle, Silver Lake, and MGX a combined 45% stake in the US joint venture. ByteDance will maintain ownership of just under 20% of the US business, but retain oversight of the rest of the world and manage TikTok US’s e-commerce, advertising, and marketing strategies. Why It Matters: This deal signifies a significant shift in the ownership structure of TikTok’s US operations. While the new investors will have a substantial stake in the company, their control over key business areas will be limited. This arrangement ensures that ByteDance, the original owner, retains control over crucial business lines, thereby maintaining its influence over the company’s strategic direction. The focus of the new investors on national security-related tasks aligns with the US government’s concerns about data privacy and security on the platform. This deal could potentially pave the way for similar arrangements in other tech companies where national security concerns are paramount. Read Next Trump Amplifies TikTok Demanding Ban on ‘Dishonest' Media Following Charlie Kirk Assassination