In a significant development aimed at resolving a prolonged standoff with the United States government, the popular short-video platform TikTok has inked a preliminary agreement to sell its American operations. The deal involves a consortium led by prominent US investors, including software giant Oracle and retail behemoth Walmart.
The Core of the Agreement: A New Entity Named TikTok Global
The proposed transaction is not a straightforward asset sale. Instead, it envisions the creation of a new, independent company to run TikTok's services in the United States. This entity will be called TikTok Global. According to the terms, Oracle and Walmart will take a combined 20% stake in this new company. Oracle will secure a 12.5% share, while Walmart will hold 7.5%. The remaining ownership will stay with ByteDance, TikTok's Chinese parent company, and other American investors.
This structure is a critical component designed to address the core issue raised by the US Committee on Foreign Investment (CFIUS): data security and potential foreign influence. Oracle will become TikTok's trusted technology partner in the US, responsible for hosting all American user data and securing the associated computer systems. This move is intended to ensure that US data remains on US soil, managed by a US company.
Addressing National Security and Creating American Jobs
The deal directly responds to the executive orders issued by President Donald Trump, which cited national security risks as the reason for seeking a ban on TikTok unless it was sold to an American owner. The formation of TikTok Global, with substantial US investment and oversight, is the proposed solution. The agreement also includes provisions for TikTok Global to create 25,000 new jobs in the United States and is expected to contribute over $5 billion in new tax dollars to the US Treasury.
Furthermore, the board of TikTok Global will consist of five members, with the majority being American citizens. This includes a security director who must be approved by the US government. ByteDance's founder, Zhang Yiming, will also have a seat on the board. The company has committed to pursuing an initial public offering (IPO) on a US stock exchange within the next 12 months, a move that would further increase public transparency and American ownership.
What This Means for Users and the Ongoing Geopolitical Tussle
For the millions of American users and content creators who rely on the platform, this deal, if finalized, would mean that TikTok can continue to operate without interruption. The app faced a potential shutdown in the US app stores on September 20, followed by a broader ban on November 12, as per the President's orders. This agreement seeks to avert those drastic measures.
However, the path forward is not entirely clear. The deal still requires formal approval from both the Chinese and American governments. Chinese authorities recently updated export control rules that could give them a say in the transfer of TikTok's sophisticated recommendation algorithm, which is considered a key asset. On the American side, the arrangement must satisfy the national security concerns of CFIUS and the White House. President Trump has given the deal his "blessing" in principle, but the final regulatory hurdles remain.
This saga highlights the increasing intersection of technology, data governance, and international politics. The TikTok-Oracle-Walmart deal represents a novel corporate structure born out of geopolitical pressure, setting a potential precedent for how other tech companies might navigate similar conflicts between global superpowers in the future.
