TikTok US Sale Approved by Trump: Oracle, Silver Lake, and Andreessen Horowitz to Oversee Operations, Valued at $14 Billion

TikTok, the popular social media platform, has been embroiled in controversy for four years due to concerns over user data potentially being accessible by foreign entities, particularly the Chinese government. These concerns have led to a tense environment for U.S. users, with the app experiencing a temporary outage earlier this year that left millions of users in limbo before its swift restoration.

Recently, a deal has been reportedly agreed upon that will see TikTok’s U.S. operations transferred to an American investor group. This sale, valued at approximately $14 billion according to Vice President JD Vance, could potentially see the platform’s U.S. business soar in value to over $60 billion, as estimated by CFRA Research’s senior vice president Angelo Zino.

The deal has received approval from both Chinese and American authorities, with ByteDance assuring that the platform will remain accessible to American users. A consortium of investors, including Oracle, Silver Lake, and Andreessen Horowitz, is expected to hold an 80% stake in the new entity, while the remaining shares will be owned by Chinese stakeholders.

The board of the new entity is anticipated to consist predominantly of U.S. members, with one member appointed by the U.S. government. Reports suggest that Rupert Murdoch and his son Lachlan, Oracle’s executive chairman Larry Ellison, and Dell Technologies CEO Michael Dell may play a role in the deal.

Oracle is likely to oversee the app’s security and safety measures, having already provided cloud services for TikTok and managed user data within the U.S. The company previously bid for TikTok in 2020. As part of the proposed arrangement, Oracle will replicate and secure a new U.S. version of the algorithm, with the U.S.-based owners leasing it from ByteDance.

ByteDance will no longer have access to information about TikTok’s U.S. users or any influence over the U.S. algorithm. Reports indicate that when the deal is finalized, the existing TikTok app may be discontinued in the U.S., with users transitioning to a new platform. The specifics of this platform remain largely unclear, including its features and how it will differ from the original app.

To provide context to this high-stakes negotiation, we’ll revisit the tumultuous relationship between TikTok and the U.S. government, which has led to numerous legal battles and negotiations. The controversy began in August 2020 when an executive order was signed to ban transactions with parent company ByteDance.

This order sought to force a sale of TikTok’s U.S. operations to a U.S.-based company, with contenders including Microsoft, Oracle, and Walmart. A U.S. judge temporarily blocked the executive order, allowing TikTok to continue operating while the legal battle unfolded.

Progress continued last year following the transition to the Biden administration, with the Senate passing a bill against TikTok. President Joe Biden subsequently signed it into law. In response, TikTok sued the U.S. government, arguing that the app and its American users were having their First Amendment rights violated. The company has consistently denied posing a security threat, asserting that its data stored in the U.S. complies with all local laws.

Fast-forward to today: the deal, which aims for a 50-50 ownership arrangement between ByteDance and a U.S. company, is not without contenders. Among these are The People’s Bid for TikTok, a consortium organized by Project Liberty founder Frank McCourt, and the American Investor Consortium, led by Employer.com founder Jesse Tinsley. Other potential buyers include Amazon, AppLovin, Microsoft, Perplexity AI, Rumble, Walmart, Zoop, former Activision CEO Bobby Kotick, and former U.S. Treasury Secretary Steven Mnuchin.

The story is still developing.