TikTok has signed a deal to sell its US business to three major investors — the UAE's MGX, Oracle and Silver Lake — ensuring the popular social video platform can continue operating in the country, media outlets have reported.
The deal is expected to be closed on January 22, according to an internal memo seen by news outlets.
The company's chief executive Shou Zi Chew said in the memo that ByteDance and TikTok have signed binding agreements with the three investors.
The new TikTok US joint venture will be 50 per cent held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15 per cent each. Another 30.1 per cent will be held by affiliates of existing ByteDance investors and 19.9 per cent will be retained by ByteDance, according to the memo.
MGX is a sovereign AI vehicle established by the Abu Dhabi government to invest in the building blocks of future technology.
“Upon the closing, the US joint venture, built on the foundation of the current TikTok US Data Security organisation, will operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance,” Mr Shou said in the memo.
“TikTok Global’s US entities will manage global product interoperability and certain commercial activities, including e-commerce, advertising and marketing."
The US venture will have a new, seven-member, majority-American board of directors, the memo said. It will also be subject to terms that “protect Americans’ data and US national security".
US user data will be stored locally in a system run by Oracle.
TikTok’s algorithm that powers its video feed will be retrained on US user data to “ensure the content feed is free from outside manipulation”, the memo said. The US venture will also oversee content moderation and policies within the country.
The US Congress had passed a law last year ordering TikTok to be sold to a US entity over fears that China-owned ByteDance was handing over American user data to Beijing.
The reported signing of the agreement ends months of speculation over who the new owners might be.
