The anticipated ownership deal for TikTok is expected to be finalized within the next few days, according to Dan Leavitt, a spokesperson for the app’s parent company ByteDance. Speaking on US broadcaster Fox, Leavitt emphasized the urgency of the situation, noting that this agreement will address ongoing concerns regarding the app’s operations in the United States, where it has a substantial user base of approximately 170 million.
Concerns Over Data Security
US officials have expressed serious apprehensions about potential access by the Chinese government to vast amounts of personal data through TikTok. These worries stem from the platform’s Chinese ownership, which has led to fears of political influence over American users. Both TikTok and ByteDance have consistently denied these allegations, asserting that user data is secure.
Under the proposed deal, TikTok would be restructured so that it is majority-owned by American investors. Leavitt explained that the agreement includes provisions for a board of directors composed of seven members, with six of those seats occupied by Americans. This shift aims to enhance trust and transparency regarding the app’s governance.
A significant aspect of the deal involves the storage of American users’ data, which will be handled through US cloud infrastructure managed by Oracle, a leading American technology firm. Leavitt stated, “The data and privacy will be led by one of America’s greatest tech companies, Oracle, and the algorithm will also be controlled by America as well.” This move is designed to provide reassurance to US regulators about data management practices.
Political Ramifications and Ownership Structure
The urgency surrounding TikTok’s ownership is heightened by legislation passed by Congress in 2024, which mandates the app’s shutdown by January 2025 if ByteDance does not divest its US assets. The former President Donald Trump has been actively involved in efforts to prevent a ban on the app, crediting it with bolstering his re-election campaign. Trump himself boasts 15 million followers on TikTok, and the White House recently launched an official TikTok account, further indicating the platform’s significance in the political landscape.
Despite the impending deadline, Trump has delayed enforcement of the law multiple times, allowing for negotiations aimed at securing American ownership of TikTok’s US operations. According to reports from the Wall Street Journal, US investors, including Oracle and prominent investment firms like Silver Lake and Andreessen Horowitz, are expected to hold as much as 80 percent of a newly formed US subsidiary, with the remaining 20 percent likely to be retained by Chinese stakeholders.
Though ByteDance is officially registered in the Cayman Islands and claims to be 60 percent owned by international investors, its large operational base in Beijing subjects it to Chinese regulations that complicate its relationship with US authorities. Despite the founders’ relatively small 20 percent stake, they maintain significant control through shares with enhanced voting rights.
The outcome of this deal will play a crucial role in shaping the future of TikTok in the US, as it seeks to balance international investment with domestic regulatory compliance. As negotiations progress, all eyes remain on how this situation unfolds in the coming days.
