Trump reveals Chinese leader's consent for TikTok arrangement
TikTok, the popular short-video app, is set to undergo a significant change in ownership, with American investors poised to take over the majority stake. According to recent reports, a consortium of investors including Oracle, Silver Lake, and Andreessen Horowitz, as well as existing ByteDance shareholders such as Susquehanna International Group (SIG), General Atlantic, and KKR, are expected to hold around 80% of a new US subsidiary of TikTok. ByteDance will retain a 19.9% stake.
The parent company of TikTok, Bytedance, is headquartered in Beijing, China. However, due to international investments, Bytedance is 60% owned by overseas investors and is based on the Cayman Islands. This move brings another online platform in the US under the financial influence of entrepreneurs sympathetic to the right-wing political camp around President Donald Trump.
Oracle, backed by Trump supporter Larry Ellison, will retain its role as TikTok's technical service provider in the US. The deal is 'well underway' and investors are preparing, according to President Trump. The TikTok deal was initially due to be completed by January 19, 2025, or the app would be shut down in the US, as per a US law passed last year. However, President Trump has granted multiple extensions to this deadline.
The US government is yet to receive any funds from investors as part of the TikTok transaction, as reported by the Wall Street Journal. The situation regarding TikTok outside the US, such as in Germany, is unlikely to be impacted.
President Trump has reaffirmed that the agreements would prevent Chinese influence over the app. Chinese President Xi Jinping has reportedly agreed to a deal regarding the video app TikTok. The founders of Bytedance, including Zhang Yiming, only hold a 20% stake but maintain control through shares with more voting rights.
TikTok previously stated that it has over 170 million users in the US. The new US subsidiary of TikTok is not yet fully formed, as reported by the Wall Street Journal a few days ago. The situation is unlikely to have any impact on the operation of the short video app outside the US.
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