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

"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."

"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."

Oracle, Abu Dhabi firm MGX, and Silver Lake will form a US joint venture focused on national-security tasks including data management, algorithm training, US data protection, algorithm security, content moderation, and software assurance. The joint venture will operate independently through the TikTok US Data Security (USDS) organization, while TikTok Global's US entities will handle product interoperability and commercial activities. The investors will hold a combined 45% stake in the US joint venture; ByteDance will retain just under 20% of the US business and maintain oversight of global operations. ByteDance will continue to manage e-commerce, advertising, and marketing. The deal is expected to close in late January.

Read at Benzinga