TikTok closes deal to divest U.S. operations

"Zoom in: With the deal, U.S. tech giant Oracle, private equity firm Silver Lake and Abu Dhabi-based investment firm MGX will collectively own 45% of the U.S. entity, which will be called "TikTok USDS Joint Venture LLC." Nearly one-third of the company will be held by affiliates of existing ByteDance investors, some of which are American firms. Nearly 20% of the joint venture will be retained by ByteDance."

"Between the lines: The joint venture will be responsible for U.S. data protection, algorithm security, content moderation and software assurance. The joint venture will license the company's algorithm from ByteDance and will retrain it on U.S. user data in an effort to ensure the content U.S. users see is free from outside manipulation, the company has said. After the deal closes, Oracle will act as the security partner responsible for auditing and validating compliance with the agreed upon national security terms."

"By the numbers: The deal values TikTok U.S. at around $14 billion, a source confirmed to Axios, which is an extremely low price given that TikTok's U.S. entity makes roughly $14 billion annually in advertising revenues alone, per analyst estimates. Catch up quick: The White House and the Chinese government hammered out a deal in principle in September to sell TikTok's U.S. operations to a joint venture controlled by a U.S. investor group led by Andreessen Horowitz, Silver Lake and Oracle."

Oracle, Silver Lake and MGX will own 45% of the U.S. entity TikTok USDS Joint Venture LLC. Affiliates of existing ByteDance investors will hold nearly one-third, and ByteDance will retain nearly 20%. The joint venture will manage U.S. data protection, algorithm security, content moderation and software assurance. It will license the algorithm from ByteDance and retrain it on U.S. user data to prevent outside manipulation. Oracle will act as the security partner auditing compliance with national security terms. The deal values TikTok U.S. at about $14 billion despite analyst estimates of comparable annual ad revenue. Prior terms shifted partly due to conflicts of interest; Trump issued a 2020 order demanding the sale and Congress passed a 2024 law targeting the app.

Read at Axios