The future of TikTok in the United States has been reshaped as its Chinese parent company, ByteDance, carved out a new American venture to meet federal requirements. This move addresses national security concerns that have long dogged the app, which has over 170 million U.S. users.
The Deal Explained
On Thursday, ByteDance announced that about 80% of the U.S. TikTok operation will be owned by non-Chinese investors. ByteDance will retain a 19.9% stake but will no longer be the primary controller.
This restructuring is a direct response to a 2024 law designed to separate TikTok from its Beijing ties. The law was born from fears that user data could be accessed by the Chinese government, and that the app’s algorithm could be used for propaganda or surveillance.
Who Holds the Keys Now?
The key player in this new ownership structure is Oracle. The tech giant, known for its cloud computing and database software, will now be a major stakeholder in TikTok’s U.S. operations. Oracle already has a history of working with cutting-edge tech companies like OpenAI (the creator of ChatGPT) to manage the infrastructure behind large-scale AI applications.
The new venture will license TikTok’s core algorithm from ByteDance, giving it control over content moderation and user experience. However, this licensing agreement ensures that ByteDance still has some influence over the app’s functionality.
Why This Matters
This deal is significant because it represents the U.S. government’s aggressive stance on data security and foreign tech ownership. The move is part of a broader trend of scrutiny towards Chinese-owned apps operating in the West, with concerns about espionage and political influence. The situation raises questions about whether other foreign-owned platforms will face similar pressure in the future.
Ultimately, the restructuring of TikTok’s U.S. ownership aims to reassure lawmakers and the public that the app operates independently from Chinese control, while still allowing ByteDance to maintain some financial and technological ties.
