ByteDance, TikTok’s Chinese parent company, recently established a separate American entity to run the app’s U.S. operations. This restructuring aims to separate U.S. TikTok from its Chinese parent, addressing concerns about data privacy and foreign control.
The move came after years of pressure from lawmakers, who feared the Chinese government’s potential access to Americans’ data. In 2024, Congress enacted a law, mandating that TikTok’s U.S. operations be separated from ByteDance.
Under the new structure, about 80% of the U.S. TikTok entity is owned by non-Chinese investors, with ByteDance keeping only a 19.9% share. The newly formed entity, “TikTok USDS Joint Venture LLC,” licenses TikTok’s recommendation algorithm from ByteDance and independently manages content moderation, and oversees data protection, algorithm security, and software controls.
The managing investor group consists of Oracle, the private equity firm Silver Lake, and the investment firm MGX. Each holds a 15% stake, totaling 45% of the U.S. business. Here’s what you should know about them.
Oracle
Oracle is a leading cloud computing and database firm that collaborates with top companies, such as OpenAI. Oracle previously attempted to acquire TikTok and already provides cloud infrastructure for the app, managing its U.S. user data.
Under the new deal, Oracle serves as the security partner, auditing TikTok’s compliance with U.S. security requirements, managing data storage, and overseeing updates to the content recommendation algorithm.
It’s important to note that Oracle co-founder Larry Ellison, now the company’s executive chairman and chief technology officer, is a prominent billionaire with known connections to President Trump.
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MGX
MGX is an AI-focused investment firm based in the United Arab Emirates, which invests in semiconductors and data centers. The firm was created by Mubadala (Abu Dhabi’s sovereign wealth fund) and G42, an Emirati AI company.
MGX’s stake in U.S. TikTok could give the firm influence over key decisions shaping TikTok’s AI direction. The firm already backs Elon Musk’s xAI, Anthropic, and OpenAI, and contributed to a $100 billion AI data center initiative announced by President Trump, in which Oracle is participating as well.
It’s also worth pointing out that MGX has partnerships with Microsoft and BlackRock.
Silver Lake
Silver Lake, a leading U.S. private equity firm, has long invested heavily in technology companies, including Airbnb, Twitter, Dell Technologies, Tesla, and Waymo. Its role in U.S. TikTok is primarily financial and strategic, offering capital and expertise to help shape the platform’s direction.
Notably, Silver Lake has collaborated with MGX in the past, including during the acquisition of a majority stake in the software and chip company Altera last year. Additionally, Silver Lake has invested in G42 since 2021.
Other investors
- Dell Family Office: Michael Dell’s investment firm.
- Vastmere Strategic Investments: A firm affiliated with Susquehanna International Group (SIG), which is owned by billionaire Jeff Yass.
- Alpha Wave Partners: A global investment firm involved with notable companies, including SpaceX and Klarna.
- Virgo LI: The investment arm associated with Israeli tech investor Yuri Milner, who was an early backer of Facebook and Twitter.
- NJJ Capital: The family office of Xavier Niel, a French billionaire businessman who founded telecommunications company Iliad.
- Revolution: The venture capital firm founded by AOL co-founder Steve Case.
- Merritt Way: Managed by partners of Dragoneer Investment Group, a San Francisco-based investment firm.
- Via Nova: An affiliate of General Atlantic.
Source: techcrunch.com
