TikTok signs deal to sell its US unit to US investor group: NPR

TikTok has signed a deal to separate its US operations into a group controlled mostly by US investors, including software giant Oracle, a company run by billionaire Trump ally Larry Ellison.

The new US company is set to oversee TikTok’s highly interactive algorithm and the massive amount of data the app has collected on millions of Americans. Under the agreement, TikTok’s American algorithm will be retrained using only Americans’ data. Content moderation rules about what is and is not allowed will be established by the new investor-controlled entity.

However, the underlying algorithm will remain owned by Beijing-based ByteDance, with the blessing of US auditors, according to an internal TikTok memo reviewed by NPR and two sources familiar with the deal who were not authorized to speak publicly.

“With the US majority managing content moderation, concerns about foreign propaganda appear to have diminished,” said Anupam Chander, a professor of law and technology at Georgetown University who studies regulation of new technology. “But it’s possible that US TikTok could end up censoring or hiding speech allowed on the global TikTok platform. I hope the US content moderation team will allow speech that US owners may not like.”

Under the terms of the sale, half of the new entity that will control the US version of TikTok will be owned by a consortium of investors including Oracle, private equity firm Silver Lake and UAE state-backed investment firm MGX. These three will control 45% of the new American TikTok entity.

Oracle, Silver Lake and MGX did not return requests for comment.

About a third of the newly formed TikTok operation will be held by existing investors in ByteDance, the video app’s Chinese parent company. ByteDance will retain about 20%.

A seven-member board of directors, most of whom are Americans, will oversee the new entity, according to the memo Reported for the first time By Axios.

The deal culminates more than five years of mounting pressure from Washington, where bipartisan concerns over TikTok’s ties to China prompted Congress to pass a law in 2024 that would have banned the app unless it was sold.

The Supreme Court upheld this law in January. For months, TikTok had technically been operating in violation of federal law, but Trump issued a series of executive actions to delay enforcement of the law that would have banned the popular video app.

Jim Scritto, a former Treasury official who worked on TikTok policy during the Biden administration, said the deal signed Tuesday does not completely sever ties with ByteDance, which is what the law passed by Congress was intended to do.

“The law requires a clear separation from ByteDance. This structure does not meet that standard,” Secreto said. “It looks more like a concession deal that leaves TikTok’s core technology in China than a true divestment. By bypassing the guardrails put in place by Congress, national security concerns about secret access to data and algorithm manipulation remain unresolved.”

The White House declined to comment.

TikTok has an estimated 2 billion users globally, and less than 10% of its global users reside in the United States.

A new US entity overseeing the US version creates a strange situation for the viral video app: one version of the service will be overseen by a US-backed company, with additional checks and balances on content streams and data security while the second version of the app, managed entirely by ByteDance, will be available to the rest of the world.

The deal delivers a major win for Larry Ellison, expanding his family’s grip on more corners of American media and entertainment.

Ellison is a major backer of Paramount Skydance, a deal that was finalized this year.

His son, David Ellison, who is chairman and CEO of Paramount Skydance, has made a hostile bid for Warner Bros. Discovery, just as streaming giant Netflix made its own show, which was backed by top brass at Warner.