TikTok signs deal for sale of American business to American investors

Washington – TikTok has signed an agreement to sell its US operations to a consortium of American investors, a source familiar with the matter confirmed to CBS News.

Axios was the first to report the deal.

Under the law he passed last yearTikTok’s Chinese parent company, ByteDance, must sever ties with the social media operation in America or lose access to US app stores and web hosting services. The law set a January 2025 deadline, but President Trump has extended it several times, most recently to Jan. 23, 2026.

In September, Mr. Trump signed an executive order paving the way for an agreement made by his administration to keep TikTok operating in the US under a new business structure with American investors.

At the time, a senior White House official said that under the proposed deal, ByteDance’s recommendation algorithm that powers TikTok would be copied and retrained to only work on data from the US user base. Cloud computing firm Oracle will provide “top-to-bottom security” by hosting US users’ data and review application code to ensure “the algorithm behaves correctly and is secure,” the official said.

The deal will establish a “joint venture” based in the US, with a majority of American investors and owners and a majority of Americans on the board of directors, the White House said in September. The order of Mr. Trump says ByteDance and its subsidiaries will own less than 20% of the new business, keeping it under the foreign ownership limit imposed by last year’s divestment or ban law.

A consortium of American investors, including Oracle, is expected to contribute to the new TikTok, the White House said earlier. (Oracle was founded by Larry Ellison, whose son David Ellison is chairman and CEO of Paramount Skydance, the parent company of CBS. The Ellison family owns a controlling interest in Paramount Skydance.)

Axios reported Thursday that Oracle, Silver Lake and Abu Dhabi-based MGX will own 45% of the American business. About one-third of the new venture will be owned by current ByteDance investors, according to Axios.

When reached by CBS News on Thursday, an Oracle spokesperson declined to comment on the deal.

“We feel 100% confident that this proposal, if finalized, is consistent with the law,” a senior White House official said in September, adding that the White House believes it is “consistent with all applicable laws and policies on both sides.”

Mr. Trump told reporters that Chinese President Xi Jinping signed the deal during a speech in September. “He gave us permission to go forward,” said Mr.

China’s comments on what was agreed were vague.

“China’s position on the TikTok issue is clear: The Chinese government respects the wishes of the company in question, and would be happy to see productive trade negotiations in accordance with the rules of the market leading to a solution that complies with the laws and regulations of China and takes into account the interests of both parties. The US side needs to provide an open, fair and non-discriminatory environment between Trump’s Chinese investors and Chinese investors. said.

The law of sale or prohibition, which existed approved by the Supreme CourtIt started working a day before the inauguration of Mr. Trump last January. Mr Trump, however, has pulled out new orders every few months it directs the Department of Justice not to take action or impose fines on companies like Apple and Google for failing to remove a popular app from their platforms.

There has been little pushback from lawmakers, who for years have raised concerns about TikTok’s potential national security risks if the Chinese government gained access to large amounts of Americans’ personal data collected by the app or carried out influential activities with it.

But some may see the deal as not going far enough when it comes to TikTok’s algorithm. After the White House announced the deal in September, Rep.

“The transition to a majority American-owned company would mark an important step in that process that could reduce some of ByteDance’s threats depending on the details, but the divestiture was not the only legal requirement,” Moolenaar said in a statement. “The law also imposed strict monitoring rules prohibiting cooperation between ByteDance and any potential successor to TikTok’s highly valuable recommendation algorithm, as well as prohibiting a working relationship between the new entity and ByteDance.”