What you should know about the owners of US TikTok

ByteDance, the Chinese parent company of TikTok, has recently restructured its operations in the United States by establishing a new American entity to oversee the app. This strategic move aims to distance U.S. TikTok from its Chinese ownership, primarily in response to ongoing concerns regarding data privacy and foreign governance. Following years of pressure from U.S. lawmakers worried about potential Chinese access to American user data, Congress enacted legislation in 2024 mandating this separation. Under the newly formed structure, approximately 80% of TikTok's U.S. operations are now owned by American investors, while ByteDance retains a minority stake of just 19.9%. The new entity, known as “TikTok USDS Joint Venture LLC,” is tasked with licensing TikTok’s recommendation algorithm from ByteDance and operates independently to manage content moderation, data protection, and algorithm security. Among the key investors in this venture are Oracle, Silver Lake, and MGX, each holding a significant 15% stake, collectively controlling 45% of the U.S. TikTok business. Oracle, a prominent cloud computing and database company, has a history of collaboration with major tech players, including OpenAI. Previously, Oracle attempted to acquire TikTok and currently manages its U.S. user data. In this new arrangement, Oracle will serve as the security partner, ensuring compliance with U.S. security standards, managing data storage, and overseeing the content recommendation algorithm's updates. It's noteworthy that Oracle's co-founder, Larry Ellison, who holds the titles of executive chairman and chief technology officer, has established connections with former President Trump. MGX, an investment firm with a focus on artificial intelligence based in the United Arab Emirates, is also a key player. This firm, backed by Mubadala (the Abu Dhabi sovereign wealth fund) and G42, holds a stake in U.S. TikTok that may influence the platform's AI strategies. MGX has previously invested in initiatives like Elon Musk's xAI and has collaborated on a significant $100 billion AI data center project, which also involves Oracle. Lastly, Silver Lake, a leading private equity firm in the U.S., has a strong track record of investing in technology companies such as Airbnb, Twitter, and Tesla. Their involvement with U.S. TikTok is primarily focused on providing strategic and financial support to help guide the platform's development. Silver Lake has also partnered with MGX on previous investments, including a majority stake acquisition in the semiconductor and software firm Altera last year, and has been involved with G42 since 2021.