Is TikTok genuinely divesting its United States operations? The answer is nuanced — it is partly true, though the reality is more intricate than a straightforward sale. TikTok has reportedly reached a carefully structured agreement that would establish a new configuration of ownership in its U.S. branch through a joint-venture model. This structure introduces a consortium of high-profile investors: Oracle, the American technology corporation led by Larry Ellison; MGX, an investment firm based in Abu Dhabi; and Silver Lake, a private-equity powerhouse known for its extensive technology portfolio. Together, these entities are positioned to assume managerial roles within a freshly formed U.S. spin-off, signifying a rearrangement of operational control rather than a full transfer of ownership.
However, the crucial question remains: how much actual authority will these investors wield over the profit-generating aspects of TikTok’s American business? According to an internal memo distributed on Thursday by TikTok’s CEO, Shou Chew — a document subsequently reviewed by Business Insider — their influence will be limited. The investors’ responsibilities are expected to revolve primarily around issues deemed sensitive to U.S. national security. This includes oversight of data handling protocols, secure management of information systems, and supervision of algorithm training environments to ensure compliance with American data-protection standards. Core commercial activities, on the other hand — such as advertising, marketing strategies, and the rapidly expanding e-commerce division — will remain firmly under the dominion of ByteDance, TikTok’s Beijing-based parent company.
In his note to employees, Chew elaborated that the forthcoming U.S. joint venture will evolve from the existing TikTok U.S. Data Security (USDS) organization, transforming it into an autonomous entity endowed with significant but specialized authority. This independence will cover domains including data protection, content moderation, security assurance for algorithmic operations, and software reliability verification. Meanwhile, TikTok Global’s American entities will continue to oversee the overarching business integration between different international markets, ensuring smooth interoperability of the global app ecosystem and supervising broader commercial activities such as digital marketing, international advertising campaigns, and vendor partnerships in e-commerce.
Essentially, even though these prominent investors are being granted equity stakes in the U.S. venture, their operational command over TikTok’s primary revenue-generating units — noteworthy examples being TikTok Shop and the company’s robust digital advertising infrastructure — will remain marginal. While they may share in profits produced by these functions, they will not be assuming the strategic leadership positions that drive them. ByteDance’s global division will persist as the principal decision-maker directing commercial innovation, advertising partnerships, and monetization tactics. As Chew assured in his communication, existing advertising collaborators should expect a seamless continuation of business, maintaining full access to global audiences without disruptions or geographical restrictions.
Observers have noted that this arrangement appears heavily oriented toward alleviating U.S. government concerns regarding national security and user data sovereignty, rather than restructuring the company’s commercial power. This focus may also elucidate why the White House, when referencing the proposal in September, valued the agreement at approximately $14 billion — a significantly lower assessment than the $50 billion valuation projected earlier by analysts at Morningstar in June. This gap underscores that the deal emphasizes compliance and political appeasement far more than immediate financial advantage.
Under the deal’s proposed ownership breakdown, which Chew indicated could be finalized by late January, Oracle, Silver Lake, and MGX would collectively obtain a 45 percent equity position in the newly constituted U.S. entity. Additionally, affiliates linked to ByteDance’s current investors would control roughly another 30 percent, while a smaller contingent of yet-unnamed new investors would acquire a modest 5 percent share. As a result, ByteDance itself would maintain just below a 20 percent direct ownership stake in the American business, thereby preserving a minority hold yet retaining comprehensive authority over TikTok’s global operations outside the United States. This includes supervision of international e-commerce development, worldwide advertising strategies, and cross-market marketing initiatives.
When seen in context, this outcome could be viewed as a surprisingly favorable resolution for TikTok and ByteDance, considering the challenging political climate and legislative pressure the company has faced throughout 2024 and 2025. During this period, U.S. lawmakers passed a bill effectively mandating a forced divestiture of TikTok’s American segment under threat of banishment from U.S. app stores. Against that backdrop, the current agreement represents a strategic compromise: it allows continued U.S. operation under heightened domestic oversight without fully relinquishing corporate control to outside parties.
For employees across both TikTok and its parent company, the most pressing concern has now shifted to the organizational implications of this complex ownership realignment. Many staff members are uncertain whether the agreement will bring new reporting hierarchies or alterations to the internal command structure. “Even though there’s an agreement on paper,” one TikTok employee confided, “it still doesn’t precisely define what it means for those of us on the ground.” They further suggested that, despite the changes in ownership, most employees do not anticipate dramatic shifts in their daily work or managerial relationships.
At this time, representatives from TikTok, ByteDance, and MGX have not responded to inquiries regarding the specifics of the transaction. Oracle and Silver Lake, meanwhile, have declined to issue public comments. The absence of detailed communication leaves many observers — including employees, analysts, and policymakers — waiting to see exactly how this hybrid governance model will operate once the deal reaches its anticipated closure.
Sourse: https://www.businessinsider.com/tiktok-new-us-owners-oracle-key-parts-of-the-business-2025-12
