The deal, the culmination of years of legal and political uncertainty, is part of the effort to comply with a 2024 US law that aimed to push ByteDance to divest TikTok to address national security concerns over the app’s links to Beijing. Without a divestment, the app would have faced a nationwide ban.
The new arrangement sees ByteDance retaining 19.9 per cent of the venture, with non-Chinese investors owning about 80 per cent. The new venture will license ByteDance’s powerful recommendation algorithm – described as the secret sauce to the app’s success – and moderate content on the app.
Who are the top investors?
The three “managing investors” are Silver Lake, Oracle and Abu Dhabi’s MGX. Each will hold 15 per cent of the hugely successful app.
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Silver Lake is a private equity firm headquartered in Menlo Park, California, and New York City. Co-CEO Egon Durban will serve as one of the seven members of the venture’s majority-American board of directors. Durban also serves on the boards of several Silver Lake portfolio companies, including Dell Technologies, whose founder Michael Dell has an investment firm that is taking part in the consortium backing the new venture.
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How China’s TikTok video app became a global sensation
How China’s TikTok video app became a global sensation
Oracle is an Austin, Texas-based cloud service provider that has been key to plans for a TikTok deal since 2020. While US President Donald Trump first tried to ban TikTok nationwide during his first term, he later agreed to allow the app to continue operating in the US in exchange for Oracle becoming both the app’s cloud provider and a minority shareholder, before those plans fell by the wayside amid court battles.
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