TikTok to spin off U.S. business — ownership split, Oracle to host US data, deal expected Jan 22

TikTok has signed agreements to spin off its U.S. business into a new entity with a split ownership structure intended to address long‑running national‑security and regulatory concerns. Under the reported deal, Oracle, Silver Lake and Abu Dhabi’s state investment firm MGX would each control roughly 15% of the new company, while ByteDance — TikTok’s China‑based parent — would retain about a 20% stake.

The arrangement reportedly places U.S. user data under an Oracle‑operated system and establishes a seven‑member board to manage U.S. platform operations, with a U.S. majority on that board. TikTok’s internal memo set a target closing date of January 22.

Key facts

• Ownership: Oracle, Silver Lake and MGX each ~15%; ByteDance ~20%; remaining equity held by ByteDance affiliates or other investors.
• Data custody: U.S. data to be stored in a system run by Oracle, which has long pursued a role as a data trustee for TikTok.
• Governance: A seven‑member board will run U.S. operations, with a reported American majority.
• Timeline: Internal communications indicate a planned close on January 22.

Why this matters

The deal aims to resolve years of political and regulatory pressure that argued TikTok’s Chinese ownership posed risks to U.S. data and influence. Storing U.S. user data under Oracle and putting U.S. directors in charge are intended to limit ByteDance’s practical control over American operations.

However, questions remain. ByteDance retaining a stake — together with the involvement of non‑U.S. investor MGX — may not satisfy all critics who want a clean break. Oracle’s role as data custodian raises its own scrutiny: the company’s leadership and political ties are relevant to how observers assess neutrality and security. Likewise, Silver Lake’s ties to high‑profile U.S. business figures factor into political discussions about influence and oversight.

Potential implications

• Regulatory scrutiny: The arrangement could face legal and political review to confirm it meets security requirements and the terms of any U.S. law or executive orders.
• Operational changes: TikTok may need to update its infrastructure, access controls and transparency measures so U.S. user data is effectively segregated and protected.
• Precedent: How this sale is structured could shape future approaches to foreign‑owned platforms operating under national security concerns.

For more reporting and the timeline of events, see the original coverage linked here: Detailed report on the TikTok deal.

Discussion: Does this ownership and governance structure meaningfully reduce the risk of foreign influence or data access — or is a full divestment the only acceptable solution?