TikTok Hands U.S. Operations to Oracle-Led Investor Group in Major Shift

TikTok signed a deal on December 18 to spin off its U.S. operations to a group of investors led by Oracle, a software giant controlled by billionaire Larry Ellison, a close ally of former U.S. President Donald Trump. The agreement marks a significant shift in the ownership and control of the popular social media app's U.S. operations, which have been a subject of controversy and scrutiny in recent years. According to the deal, TikTok's U.S. operations will be overseen by a new entity controlled by the investor group, which will be responsible for setting content moderation rules and retraining the app's algorithm using only data from American users. However, the underlying algorithm will still be owned by Beijing-based ByteDance, the parent company of TikTok, with the approval of American auditors, according to an internal memo reviewed by NPR and two sources familiar with the deal. The deal is seen as a compromise between the U.S. government and ByteDance, which has been under pressure to divest its stake in TikTok due to national security concerns. In 2020, the Trump administration had attempted to ban TikTok in the U.S., citing concerns over data security and the potential for the app to be used for espionage by the Chinese government. The investor group, which includes Oracle, Walmart, and other U.S.-based companies, has agreed to invest $20 billion in TikTok's U.S. operations, according to reports. The deal is expected to be completed in the coming months, pending regulatory approval. TikTok's CEO, Shou Zi Chew, said in a statement that the deal was a "significant step" towards resolving the company's issues with the U.S. government. "We are committed to working with the new investor group to ensure that our U.S. operations are compliant with all relevant laws and regulations," Chew said. The deal has been welcomed by some lawmakers, who have long been critical of TikTok's ties to the Chinese government. "This deal is a major victory for national security and consumer protection," said Senator Marco Rubio, a Florida Republican who has been a vocal critic of TikTok. "We will continue to monitor the situation and ensure that the new investor group is held accountable for any wrongdoing." However, some experts have raised concerns about the deal, citing the fact that ByteDance will still retain ownership of the underlying algorithm. "This deal may not address the underlying issues with TikTok's data collection and use," said Jennifer Grygiel, a professor of communications at Syracuse University. "We need to be cautious and ensure that the new investor group is transparent about its data practices and content moderation policies." The deal is seen as a significant development in the tech industry, which has been grappling with issues of data security, content moderation, and national security in recent years. As the deal is implemented, it will be closely watched by regulators, lawmakers, and the public, who will be looking for signs that TikTok's U.S. operations are complying with all relevant laws and regulations.