In a decisive move aimed at ending months of controversy and geopolitical concerns, TikTok officially announced the signing of a joint venture agreement with a consortium of American investors, paving the way for the continuation of its operations within the United States and removing the specter of a ban that loomed due to its Chinese ownership.
Details of the deal and the new alliance
According to an internal memo revealed by US media reports, TikTok CEO Xu Chu informed employees that parent company ByteDance had reached a final agreement to establish a new entity. This alliance includes major technology and investment firms, most notably Oracle and Silver Lake, as well as Abu Dhabi-based investment company MGX.
Under the new structure, the Chinese company ByteDance will retain only about 20% of the new entity, the maximum percentage allowed by US laws for foreign companies in such sensitive cases, to ensure that they do not have complete control over the data.
Historical context and data crisis
This move comes in response to mounting legislative pressure in Washington, specifically a law passed under former President Joe Biden. That law required ByteDance to sell its TikTok operations in the United States or face a complete ban, based on national security concerns.
For years, US concerns have centered on the possibility that the Chinese government could exploit the app to collect sensitive data on American citizens or use its sophisticated algorithms to influence public opinion. In his memo, Zhou emphasized that the new joint venture would operate as a completely independent entity, subject to US data protection regulations, with strict oversight of algorithm security and content to ensure transparency.
The political role of Larry Ellison
This deal cannot be separated from the American political landscape; billionaire Larry Ellison, founder of Oracle, plays a pivotal role in the agreement. Ellison is known as a close ally of President Donald Trump, who has previously referred to him as a reliable partner in finalizing this deal.
Ellison is making a strong comeback, not only through saving TikTok, but also through strategic partnerships in artificial intelligence with major companies, which strengthens his influence in the American technology sector.
The importance of the event and its expected impact
This agreement is a major victory for millions of users and content creators in the United States who rely on the platform as a primary source of income. It also sends a reassuring message to global markets that major tech companies are capable of finding compromises that satisfy government security requirements without sacrificing innovation or closing off open markets.
