TikTok to be controlled by US-led group including Oracle, Andreessen Horowitz: report | Latest Tech News
President Trump’s potential deal to keep away from a TikTok ban is taking form – with a number of distinguished US tech and investor companies set to take majority control of the China-owned app.
Under the proposed phrases, a group including billionaire Larry Ellison’s Oracle, Silver Lake and Andreessen Horowitz would kind a new entity overseeing TikTok’s US operations, The Wall Journal reported, citing people acquainted with the matter.
The US group will reportedly own a mixed stake of roughly 80%, with Chinese buyers holding the remainder. Under the TikTok divestment law handed by Congress last 12 months, Chinese possession can’t exceed 20%.
President Trump has prolonged the enforcement deadline for the TikTok divestment law. AFP via Getty Images
“We’ve got a deal on TikTok. I’ve reached a deal with China. I’m going to speak to [Chinese President Xi Jinping] on Friday to confirm everything,” Trump told reporters on Tuesday. “These are very big companies that want to buy it.”
The new US-run entity would be overseen by an “American-dominated board,” according to the Journal, and embrace at least one particular person designation by the Trump administration.
Current US-based ByteDance buyers, including Susquehanna, KKR and General Atlantic, will be half of the new entity that will control about 80% of TikTok, the report said.
President Trump has vowed to save TikTok from being banned. POOL/AFP via Getty Images
As The Post solely reported, current buyers like General Atlantic’s Bill Ford need to “roll” their stakes into the new US-controlled entity to keep away from capital gain taxes.
But some insiders have questioned whether or not a transfer to roll Chinese shares into a US entity would violate Congress’s 20% threshold for Chinese possession.
In an obvious effort to handle critics’ considerations about China controlling TikTok’s suggestion algorithm, customers will reportedly be prompted to swap to a new model of the app.
The app will use technology licensed from TikTok mum or dad ByteDance, with all US person data dealt with on Oracle’s servers.
The deal phrases have been hammered out by US and Chinese officers in Madrid this week as half of a tense commerce negotiations between the Trump administration and Beijing.
It’s still unclear if the proposed phrases will go muster with China hawks in Congress, many of whom are targeted on making certain Beijing can’t affect TikTok’s algorithm.
A US-led group will control about 80% of TikTok. REUTERS
Michael Sobolik, a senior fellow at the Hudson Institute and China knowledgeable, said any deal to license the algorithm from ByteDance would “likely violate the law.”
President Trump issued an government order on Tuesday delaying enforcement of the divestment law until Dec. 16, marking the latest extension of a ban that was initially set to take impact in January.
So far, the White House has sought to tamp down hypothesis about a potential TikTok deal.
“Any details of the TikTok framework are pure speculation unless they are announced by this administration,” a senior White House official told the Journal.
Meanwhile, People’s Daily, Beijing’s state-run propaganda outlet, said “China reached the relevant consensus with the United States on the TikTok issue because it is based on the principles of mutual respect, peaceful coexistence and win-win cooperation.”
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