Is TikTok really selling its US business? Like.
TikTok has reached an agreement that will give it new ownership group in the US under a joint venture agreement. Larry Ellison's Oracle, Abu Dhabi investment firm MGX and private equity firm Silver Lake are serving as managing investors for the US arm.
But what impact will these investors have on the profit side of the business? Not much, according to the internal memo. TikTok CEO Shu Chu sent to employees Thursday, reviewed by Business Insider.
The new investors will focus on national security issues such as data management and algorithm training, while TikTok's current owner, ByteDance, will remain in charge of key businesses including e-commerce and advertising.
Here's what Chu told employees about the arrangement:
The US joint venture, based on TikTok's current US Data Security (USDS) organization, will operate as an independent entity with jurisdiction over US data protection, algorithm security, content moderation and software security, while TikTok global's US operations will manage global product interoperability and certain business activities, including e-commerce, advertising and marketing.
According to Chu, TikTok's new investors will not lead key businesses such as Tik Tok Store or advertising sales, even though they may still share in the profits of the business. TikTok global, which will remain under ByteDance, will continue to run the show.
“Advertisers will continue to engage with global audiences without any influence,” Chu also wrote in the note.
That framework, which is more focused on national security concerns than business concerns, may be why the White House said in September that a deal would go ahead. estimated at $14 billion.That's well below Morningstar analysts' estimate of $50 billion in June. My colleague Peter Kafka previously delved into TikTok rating question.
Under the proposed deal structure, which Chu said is expected to close at the end of January, Oracle, Silver Lake and MGX would receive a combined 45% stake in the U.S. joint venture. Affiliates of existing ByteDance investors will receive about 30% of the shares, while an unnamed group of new investors will receive 5%.
ByteDance will retain just under 20% of the US business but will retain control of the rest of the world and manage TikTok's e-commerce, advertising and marketing strategies in the US.
That sounds like a pretty good setup for a company that spent much of 2024 and 2025 fighting to keep its U.S. business after Congress passed legislation requiring it sell your app in the USA or face a potential ban.
The question of who will actually be in charge of the various parts of the business is of utmost importance to employees at TikTok and ByteDance. Will they get a new boss or organizational structure after the deal closes?
“Even though there is an agreement, it doesn’t specifically say what it means for us yet,” one TikTok employee said. They added that they do not expect big changes.
TikTok, ByteDance and MGX did not respond to requests for comment. Oracle and Silver Lake declined to comment.
