A consortium of investors including Oracle, Silver Lake, and Andreessen Horowitz, is nearing a deal to take control of TikTok’s U.S. operations, as President Trump extends the deadline for banning the app to December 16.
The Wall Street Journal reports that in a significant development in the ongoing saga surrounding TikTok’s future in the United States, a group of U.S. investors is close to finalizing a deal that would give them majority control over the popular video-sharing app’s U.S. business. The consortium, which includes tech giant Oracle, Silver Lake, and Andreessen Horowitz, is expected to hold an 80 percent stake in the new U.S.-based entity, while Chinese shareholders would own the remaining 20 percent.
The proposed arrangement, which is being discussed by U.S. and Chinese negotiators in Madrid this week, would also see the creation of an American-dominated board, with one member designated by the U.S. government. Existing TikTok users in the U.S. would be required to migrate to a new app, which is currently being developed and tested by TikTok engineers. The new app will reportedly feature content-recommendation algorithms recreated using technology licensed from TikTok’s parent company, ByteDance.
The TikTok algorithm is the most important part of any deal struck with the Chinese from the perspective of American parents and grandparents concerns about the platform’s impact on mental health. Breitbart News has extensively covered the dangers of China’s TikTok, and that danger is covered in depth by Breitbart Senior Contributor Peter Schweizer in his book, Blood Money: Why the Powerful Turn a Blind Eye While China Kills Americans.
Schweizer has explained, based on his work in Blood Money, why a TikTok deal took so long to happen:
Schweizer points out that if China refuses to agree to a sale, it is because, as he disclosed in Blood Money, the algorithm used by the app is considered a state secret, not a regular “business” secret. The Chinese government has been quoted calling the app “a modern-day Trojan Horse” and a “key part of their information-driven mental warfare” against the West. The book showed that ByteDance does joint research with Chinese intelligence agencies on how to manipulate people online.
“China has been studying this for years,” he adds.
Under the proposed deal, Oracle would handle user data at its facilities in Texas, addressing one of the key concerns raised by U.S. officials regarding potential national security risks associated with the app. TikTok’s previous efforts to protect American data from Communist China was “largely cosmetic” according to insiders.
President Trump, who had previously threatened to ban TikTok in the U.S. due to national security concerns, has pushed back the deadline for the ban to December 16 in light of the ongoing negotiations. In a statement outside the White House on Tuesday, Trump said, “We’ve got a deal on TikTok. I’ve reached a deal with China. I’m going to speak to President Xi [Jinping] on Friday to confirm everything.”
The framework of the agreement has been under consideration since earlier this year, with discussions between the two sides beginning in January. The deal would ensure TikTok’s continued operation in the U.S., complying with a law passed last year that required the company to either strike a deal or cease operations in the country.
If finalized, the deal would bring an end to the long-running uncertainty surrounding TikTok’s U.S. operations. ByteDance, TikTok’s parent company, has seen its revenue rise by approximately 25 percent to $91 billion in the first half of this year, with around a quarter of that coming from businesses outside China. The company’s internal valuation also hit a record high of around $330 billion in August, according to a share buyback tender.
Read more at the Wall Street Journal here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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