TikTok has agreed to sell its U.S. operations to an investment group that includes Oracle, Silver Lake, and UAE-based company MGX, reports Axios. The "TikTok USDS Joint Venture LLC" that includes the three companies will own 45 percent of TikTok, while ByteDance will keep close to 20 percent. Existing investors will continue to hold the remaining shares.
The U.S. group will handle U.S. data protection and content moderation, while also maintaining algorithm security. It has been tasked with retraining the content recommendation algorithm on U.S. user data to "ensure the content feed is free from outside manipulation." Oracle will be in charge of auditing and validating compliance with National Security Terms.
The agreement states that the USDS Joint Venture will "operate as an independent entity" that has authority over U.S. data protection, while TikTok's global U.S. entities will manage global product interoperability along with e-commerce, advertising, and marketing.
With the sale, TikTok will be able to continue operating in the United States while complying with the 2024 Protecting Americans From Foreign Adversary Controlled Applications Act. The act required TikTok parent company ByteDance to sell TikTok's U.S. operations to a non-Chinese company or be banned from operating in the United States.
TikTok was briefly banned in January, but Donald Trump signed an executive order granting an extension that brought it back. The ban has been extended multiple times since then to provide additional time for a deal to be established. The agreement is set to go into effect on January 22.
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