TikTok signs agreement with Oracle to avoid US ban
In a decisive move aimed at ending months of political and legal controversy, TikTok officially announced the signing of a joint venture agreement with a consortium of American investors, ensuring the continuation of its operations within the United States and removing the specter of a ban that loomed due to its Chinese ownership.
Deal details and new partners
According to an internal memo from TikTok CEO Xu Zhou, reported by global media outlets such as Bloomberg and Axios, parent company ByteDance has approved the restructuring of a new entity to manage operations in the US market. This strategic alliance includes prominent names in the technology and investment world, with Oracle Lake , and Abu Dhabi-based MGX participating as major investors .
Under this agreement, the Chinese company ByteDance will retain only about 20% of the new entity, the maximum percentage allowed by US law for foreign companies in such sensitive cases, to ensure that data is not controlled.
Background to the conflict: The "sell or block" law
This move comes in response to immense legislative pressure on the platform, specifically a law signed by former President Joe Biden that gave ByteDance the choice between selling its US operations or facing a complete ban on the app in its largest global market. US concerns centered on national security, with White House and congressional officials repeatedly warning of the potential for the Chinese government to exploit the app to collect sensitive data on American citizens or influence public opinion through its sophisticated algorithms.
Security guarantees and data independence
In an effort to reassure lawmakers and users alike, Xu Zhu emphasized in his memo that the new joint venture would operate as a completely independent entity. He explained, "Upon completion of the transaction, the U.S. joint venture will operate under U.S. data protection regulations, with strict oversight of algorithm security and content moderation." This means that the data of U.S. users will be subject to U.S. laws and will not be accessible from outside the country.
Larry Ellison's role and Trump's relationship
The name of billionaire Larry Ellison, founder of Oracle, stands out as a pivotal player in this deal. Ellison is known for his close relationship with US President Donald Trump, who had previously mentioned him as a potential investor to save the app. Analysts suggest that having a Trump ally like Ellison at the heart of the deal could facilitate its political passage, especially since Trump himself has recently shifted his tone toward the app, calling for competition from other social media platforms.
With this agreement, TikTok appears to have secured its future in the US market, preserving its platform, which is relied upon by millions of content creators and small businesses, while adhering to the strict security standards imposed by Washington.
