TikTok US Deal: Everything You Need to Know Now (Updated 2024)
For four years, TikTok, the wildly popular short-form video platform owned by Chinese company ByteDance, has been embroiled in controversy within the United States. Concerns surrounding user data potentially being accessed by the Chinese government have fueled intense scrutiny and legislative action. This has left millions of US users navigating a complex situation, punctuated by temporary outages and ongoing legal battles. The app briefly experienced a US outage earlier this year, causing widespread concern before being swiftly restored. TikTok’s return to the App Store and Google Play Store in February marked a temporary reprieve, but the underlying issues remained. Now, a significant deal is taking shape, promising to reshape TikTok’s future in the US. This article provides a comprehensive update on the TikTok US deal, covering the key players, the timeline, and what it means for American users.
The Long Road to a Deal: A Timeline of Events
The saga of TikTok in the US has been a rollercoaster of executive orders, legal challenges, and negotiations. Understanding the history is crucial to grasping the current situation. The initial friction began in 2020, escalating into a full-blown attempt to ban the app or force a sale.
- August 2020: President Trump signed an executive order prohibiting transactions with ByteDance, citing national security concerns.
- September 2020: The Trump administration sought to compel a sale of TikTok’s US operations to a US-based company. Microsoft, Oracle, and Walmart emerged as leading contenders.
- Late 2020: A US judge temporarily blocked Trump’s executive order, allowing TikTok to continue operating while the legal proceedings unfolded.
- 2021-2023: The Biden administration reviewed the situation, initiating a national security investigation led by the Committee on Foreign Investment in the United States (CFIUS).
- March 2024: The US Senate passed a bill that could lead to a nationwide ban of TikTok if ByteDance doesn't divest its ownership stake.
- April 2024: President Joe Biden signed the bill into law, giving ByteDance approximately nine months to find a US buyer.
Who Now Owns TikTok in the US? The Investor Group Revealed
After a protracted battle, TikTok has officially signed a deal to divest a portion of its US entity to a group of American investors. This agreement, finalized after numerous extensions and negotiations, aims to address the national security concerns that have plagued the platform. According to a memo reviewed by GearTech, the investor group is comprised of Oracle, private equity firm Silver Lake, and investment firm MGX. Collectively, they will control 45% of TikTok US, while ByteDance will retain approximately a 20% stake.
This structure represents a significant shift from earlier proposals. In September 2023, reports indicated a potential framework deal involving Oracle, Silver Lake, and Andreessen Horowitz, with investors expected to hold an 80% stake. The current agreement reflects a compromise, allowing ByteDance to maintain a minority ownership position.
The Role of Key Players
- Oracle: Will serve as the trusted security partner, responsible for auditing and ensuring compliance with National Security Terms. Oracle already provides cloud services for TikTok and manages US user data. The company previously bid for TikTok in 2020.
- Silver Lake: A leading global private equity firm with a focus on technology investments.
- MGX: An investment firm specializing in growth equity.
- ByteDance: Will retain a minority stake and reportedly will not have access to US user data or influence over the US algorithm.
TikTok USDS Joint Venture LLC: The New Operating Structure
The newly formed entity, TikTok USDS Joint Venture LLC, will oversee all aspects of TikTok’s US operations. This includes crucial areas such as data protection, algorithm security, content moderation, and software assurance. A key component of the agreement involves Oracle replicating and securing a new US version of the TikTok algorithm. US-based owners will be able to lease the algorithm from ByteDance, with Oracle responsible for retraining it to ensure security and compliance.
What Does This Mean for US TikTok Users?
The implications of the deal for US TikTok users are still unfolding. Initial reports from Bloomberg suggested that the existing TikTok app would be discontinued, requiring users to transition to a new platform. However, the specifics of this new platform remain unclear, including its features and how it will differ from the original TikTok experience. The transition process and potential disruptions are major concerns for the app’s 170+ million US users.
Key concerns for users include:
- Data Privacy: Will the new platform maintain the same level of data privacy and security as the current TikTok?
- Content Continuity: Will users be able to seamlessly transfer their content and accounts to the new platform?
- Algorithm Changes: How will changes to the algorithm affect the content users see and the overall TikTok experience?
- App Functionality: Will the new platform offer the same features and functionality as the current TikTok app?
Competing Bids and Alternative Proposals
The path to the current deal wasn't without competition. Several other groups expressed interest in acquiring TikTok’s US operations, presenting alternative proposals.
- The People’s Bid for TikTok: A consortium organized by Project Liberty founder Frank McCourt, backed by Guggenheim Securities and Kirkland & Ellis. Supporters included Reddit co-founder Alexis Ohanian, Kevin O’Leary, Tim Berners-Lee, and David Clark.
- American Investor Consortium: Led by Employer.com founder Jesse Tinsley, with participation from Roblox co-founder David Baszucki, Anchorage Digital co-founder Nathan McCauley, and YouTuber MrBeast.
- Other contenders: Amazon, AppLovin, Microsoft, Perplexity AI, Rumble, Walmart, Zoop, former Activision CEO Bobby Kotick, and former US Treasury Secretary Steven Mnuchin also explored potential bids.
Addressing National Security Concerns: The Core of the Issue
The driving force behind the TikTok US deal is the US government’s concern that ByteDance’s ownership poses a national security risk. These concerns stem from the potential for the Chinese government to access US user data, censor content, or influence the algorithm to promote propaganda. The US government argues that China’s national security laws could compel ByteDance to share data with the government, even if it violates US privacy regulations.
TikTok has consistently denied these allegations, asserting that its data stored in the US complies with all local laws and that it operates independently of the Chinese government. However, these assurances have not been enough to alleviate the concerns of US lawmakers and national security officials.
The Future of TikTok in the US: What to Expect
The deal is scheduled to close on January 22, 2026. However, the road ahead is not without potential hurdles. Regulatory approvals, ongoing legal challenges, and the complexities of transitioning to a new platform could all delay or derail the agreement. The success of the deal will depend on the ability of the investor group and TikTok to address the national security concerns, maintain user trust, and deliver a compelling platform that meets the needs of American users.
The TikTok US deal represents a pivotal moment in the ongoing debate over data privacy, national security, and the influence of foreign governments on social media platforms. As the situation continues to evolve, it is crucial for users, policymakers, and industry stakeholders to remain informed and engaged.