Understanding the US TikTok Deal: Murdoch, Ellison, and the China Connection

Essential brief

Key facts

TikTok's US operations will be owned by a consortium of American investors, reducing ByteDance's stake to under 20%.

Oracle will manage US user data and license TikTok's recommendation algorithm to ensure data security.

Key figures involved include Rupert Murdoch, Lachlan Murdoch, Michael Dell, and Oracle's Larry Ellison.

The deal follows bipartisan US concerns over national security and Chinese influence via TikTok.

The US government will not directly control the new TikTok entity but has structured the deal through executive orders.

Highlights

TikTok's US operations will be owned by a consortium of American investors, reducing ByteDance's stake to under 20%.

Oracle will manage US user data and license TikTok's recommendation algorithm to ensure data security.

Key figures involved include Rupert Murdoch, Lachlan Murdoch, Michael Dell, and Oracle's Larry Ellison.

The deal follows bipartisan US concerns over national security and Chinese influence via TikTok.

The future of TikTok in the United States has been uncertain for over a year, culminating in a recent deal to transfer ownership to a group of American investors.

This move follows a law passed by Congress that threatened to ban the app in 2024 unless it was sold to US interests, citing national security concerns over potential Chinese government influence.

The White House confirmed that Oracle, a US business software company, will play a central role by licensing TikTok's recommendation algorithm and managing US user data, which will be stored on Oracle's cloud infrastructure.

ByteDance, TikTok's Chinese parent company, will retain less than 20% ownership, with control shifting to a consortium of US-based firms and investors.

Notably involved in this consortium are media mogul Rupert Murdoch and his son Lachlan, Dell CEO Michael Dell, and Oracle co-founder Larry Ellison, who is leading the investor group.

The new US entity is valued at approximately $14 billion, significantly less than ByteDance's overall valuation of around $330 billion.

This deal was facilitated after discussions between US and Chinese leaders, including a phone call between former President Donald Trump and China's President Xi Jinping, and a meeting in Madrid.

The agreement aims to ensure that TikTok operates independently of Chinese control, addressing concerns about propaganda and data security.

Trump's administration has repeatedly delayed enforcing the TikTok ban, with executive orders outlining the deal's structure, including a US-controlled seven-member board and a 120-day pause to finalize the agreement.

China has acknowledged the deal but warned against US suppression of Chinese companies.

The US government will not hold a board seat or golden share in the new TikTok entity, emphasizing a private-sector-led solution to the app's contentious status.

This resolution reflects a complex interplay of technology, geopolitics, and business interests, balancing national security with the app's popularity among American users.