In 2024, Congress passed and President Biden or his autopen signed legislation to compel Beijing-based ByteDance to sell and cede control of TikTok to American buyers.
TikTok is a popular short-video app that many judge a national security threat for reasons having to do with its being subject to the control of the Chinese Communist Party (see links below). Under the legislation, the alternative to divestiture was that TikTok would be banned in the United States.
On constitutional grounds, ByteDance challenged the law in court, unsuccessfully.
January 19, 2025
The deadline to sell or be banned arrived on January 19, 2025, just as Donald Trump was about to be again inaugurated as president of the United States. In compliance with the new law, social media companies removed the TikTok app from their app stores.
The absence was brief. On January 19, President-elect Trump announced that as president he would issue an executive order to delay imposition of the ban and asked social media companies to make the TikTok app available again in their U.S. app stores. He assured them that his order would “confirm that there will be no liability for any company that helped keep TikTok from going dark before my order.”
Under HR 7521, the ban could not be deferred unless a deal to divest were in the works. But the provisions are vague enough or the determination of congressional and other supporters of the law to enforce it has been weak enough that the president has been able, since then, to defer a ban again and again and again. He has done so merely by issuing further executive orders, a possibility that HR 7521 does not provide for.
Finally the outlines of a U.S. deal with ByteDance and the Chinese Communist Party regarding TikTok began to emerge. If consummated, it would not entail complete divestiture. ByteDance would still have a stake, but American investors, or “American and global investors” would have majority control of the U.S. version of TikTok.
The beginning of the end
Reuters reports that ByeDance has “signed binding agreements with three major investors to sell just over 80% of the company’s U.S. assets to American and global investors to avoid a U.S. government ban, TikTok CEO Shou Zi Chew told employees on Thursday” (December 18, 2025).
If all goes “well,” the deal is supposed to get finalized on January 22.
Will U.S. investors, together, be majority owners of TikTok? You might think so if you say “American and global investors will own just over 80% of the company’s U.S. assets” five times fast.
But: “The U.S. joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15% each; 30.1% held by affiliates of certain existing investors of ByteDance; and 19.9% will be retained by ByteDance, the memo said.”
I’m guessing that the “certain existing investors of ByteDance” are not U.S. persons or entities; if they were, they would have been put in the “U.S. investors” column.
CNN says what Reuters says:
Under the agreement, the US TikTok app will be controlled by a new joint venture, 50% of which will be owned by a consortium of investors comprised of tech company Oracle, private equity firm Silver Lake and Emirati-backed investment firm MGX. Just over 30% of the joint venture will be held by ‘affiliates of certain existing investors in ByteDance,’ and 19.9% will be retained by ByteDance, according to [TikTok CEO Shou Chew’s memo]….
The new entity will retrain TikTok’s algorithm on US user data and Oracle will oversee storage of Americans’ data, as White House officials previously said. The US joint venture will also be responsible for content moderation for US users. However, Chew’s memo suggests that the ByteDance-controlled global TikTok entity will continue to manage e-commerce, advertising and marketing on the new US platform.
That’s another thing. How can the data of U.S. users be secure if Beijing-based, CCP-controlled ByteDance will have access to the new U.S. platform sufficient “to manage e-commerce, advertising and marketing”? And what will the ads say?
Oracle, by the way, is not exactly a company that users can trust to ensure the privacy of their data. Moreover, Oracle is one of the U.S. tech firms that have eagerly provided the means of China’s repression-facilitating surveillance.
Non-majority
What does 30.1% held by existing ByteDance investors and 19.9% retained by ByteDance mean? Seems to mean that ByteDance will retain 50% ownership. The U.S. investors would also have 50% ownership. Half is not a majority.
One will scour the text of HR 7521 in vain for a provision requiring divestiture or 50% ownership by U.S. investors, 50% by ByteDance and “ByteDance investors.”
The final deal will probably be final. But at least one U.S. senator promises to “take a ‘hard line’ and oppose the deal’s framework if it [further] violates the divest-or-ban law.” And the chair of the House Select Committee on the Chinese Communist Party “is planning to hold a hearing next year with US TikTok leadership.”
Also see:
Foundation for American Innovation: “Oracle is Powering China’s Surveillance State”
The Federalist: “Why The ‘#StopWillow’ Movement on TikTok May Be a CCP Influence Campaign”
StoptheCCP.org: “TikTok Only Pretends to Hide Data on U.S. Users From ByteDance and China”
Heritage.org: “TikTok Generation: A CCP Official in Every Pocket”
