For this reason, ByteDance, the Chinese parent company of TikTok, is taking a big gamble. Or, you know, it’s getting ready to spin off the rest of its American business. The company recently entered into binding agreements with a consortium of U.S. and foreign investors. Other prominent members include Oracle, Silver Lake, and the Emirati investment firm MGX. This agreement bolsters an ambitious plan released in September 2020. The plan is a strong start to address and assuage the ongoing national security concerns of TikTok’s operations in the United States.
When former President Donald Trump enforced a similar law, he delayed enforcement indefinitely. Given that sale, it has indeed come and gone. This law, once enacted, was to go into effect on January 20, 2025. It got several delays under Trump’s presidency. He claimed that he negotiated the deal personally with President Xi Jinping of China, who allegedly signed off on the deal.
According to the conditions of the agreement, investor syndicate will takeover 50% ownership of the joint venture. At the same time, affiliates of current ByteDance shareholders will own an additional 30.1%. TikTok’s CEO, Shou Zi Chew, communicated this development to employees, highlighting its importance for the company’s future in the U.S. market.
The deal puts to rest years of growing pressure from Washington to act. Officials pressured ByteDance to divest its U.S. operations due to concerns about data privacy and national security. In response to President Joe Biden’s push, Congress passed legislation in April 2024 that would have banned TikTok unless it agreed to a sale.
The expected closing date for this transaction is January 22, 2025. ByteDance has clearly made the choice to proceed with the sale. That decision comes in direct reaction to years of pressure from US legislators and regulatory agencies regarding foreign interference on American technology platforms.
It’s no wonder TikTok is optimistic about its future in the U.S. They focused on the role their platform plays in helping users access a global community.
“over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community” – TikTok