Trump signs order to transfer TikTok US to American investors
The saga surrounding TikTok in the United States has reached a significant turning point. Recently, Donald Trump signed an executive order that facilitates the transfer of the popular social media platform to a group of American investors. This move aims to ensure that TikTok complies with the requirements set forth by national laws that were approved in 2024.
Overview of the TikTok Acquisition
The newly restructured TikTok in the United States is projected to be valued at around 14 billion dollars, according to Reuters. Following the approval from Chinese authorities regarding the changes, TikTok's assets in the U.S. will be separated from the global operations owned by ByteDance within the upcoming weeks.
The Role of Investors in the Transition
Among the local investors, tech giant Oracle is set to play a crucial role in this transition. The Vice President of the United States, JD Vance, has highlighted that several adjustments still need to be made to formalize the deal completely. These adjustments include how the investor group will handle TikTok's core asset: its recommendation algorithm.
The executive order signed by Trump outlines that the security partners of the new ownership group will be responsible for retraining the algorithm and monitoring its operations. This aspect has raised concerns in various sectors, as the algorithm's functionality is critical to TikTok's success.
Key Figures Behind the Acquisition
The new ownership group includes notable figures from the technology and communications industry:
- Michael Dell - President and CEO of Dell Technologies
- Rupert Murdoch - Chairman Emeritus of Fox Corporation
- Larry Ellison - CTO and Founder of Oracle
These individuals bring a wealth of experience and influence, which could significantly impact the future direction of TikTok in the U.S. market.
ByteDance's Continued Role
Despite the changes, ByteDance, the Chinese parent company of TikTok, will retain a minority stake in the platform in the U.S., holding less than 20% of the division. Currently, ByteDance is valued at approximately 330 billion dollars, and TikTok accounts for only a small portion of its overall revenue.
However, reports from Chinese media suggest a contrasting narrative regarding the agreement. They indicate that ByteDance will continue to have an active role in TikTok’s operations in the U.S. through the establishment of a new company as part of the local restructuring.
New Company Structure and Responsibilities
This new enterprise, which will be created by ByteDance, is expected to oversee various aspects, including:
- E-commerce within the TikTok platform
- Branding operations
- Integration with international operations
This joint venture will also be responsible for TikTok's online security, content protection, and local business initiatives. Furthermore, ByteDance plans to open a subsidiary in the United States that would receive some revenue from the new joint venture.
Ownership and Governance Details
In this arrangement, a group of three investors, including Oracle and Silver Lake, will acquire half of TikTok's shares. However, this percentage could be subject to change. Meanwhile, current shareholders of TikTok will retain another 30% of their stock, including companies like Susquehanna International Group, General Atlantic, and KKR.
Importantly, the agreement stipulates that ByteDance must hold one of the seven positions on the board of directors of the new entity that will oversee TikTok in the United States, while the remaining six positions will be filled by American citizens.
Implications for the Future of TikTok
The implications of this acquisition extend beyond just financial transactions. The restructuring of TikTok in the U.S. is expected to impact:
- The platform's content moderation policies
- Data privacy and security measures
- The overall user experience and engagement strategies
As TikTok navigates this new chapter, the strategic decisions made by the new investors and the involvement of ByteDance will shape the platform's trajectory in one of its largest markets.
Conclusion
The TikTok acquisition saga illustrates the complex interplay between technology, national security, and international business relations. As this new chapter unfolds, all eyes will be on the platform's adaptation and how it balances regulatory demands with user engagement and corporate governance.
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