TikTok’s long-debated US “sale” is turning out to be far more limited than many initially believed. An internal memo from CEO Shou Chew reveals that while new American investors are joining the company’s US structure, control over TikTok’s core money-making businesses will remain firmly with ByteDance.
What the TikTok deal really does
TikTok has signed an agreement to spin parts of its US operations into a new joint venture, following months of political pressure and legal uncertainty over the app’s future in the United States.
Under the arrangement, Oracle, Abu Dhabi-based investment firm MGX, and private-equity group Silver Lake will become managing investors in the new US entity.
However, the memo makes clear that this is not a full handover of TikTok’s business.
According to the memo seen by Business Insider, the new US investors will not control TikTok’s main commercial engines.
Their responsibilities will focus on national-security-related areas, including:
- Protection of US user data
- Algorithm security
- Content moderation oversight
- Software assurance and compliance
TikTok’s global operations, still run by ByteDance, will continue to manage e-commerce, advertising, and marketing, including TikTok Shop and ad sales, which generate most of the platform’s revenue.
“Advertisers will continue to connect with global audiences with no impact,” Chew told staff.
The US entity will be built on the existing TikTok US Data Security (USDS) framework. It will function as a standalone operation responsible for safeguarding American user data and addressing regulatory and national security concerns.
At the same time, TikTok’s global US entities will continue handling product interoperability and all commercial activities linked to the wider international business.
Under the proposed structure:
- Oracle, Silver Lake, and MGX will jointly own 45% of the US joint venture
- Affiliates of existing ByteDance investors will hold about 30%
- A group of new investors will own roughly 5%
- ByteDance will retain just under 20%
Despite its smaller ownership share, ByteDance will continue to oversee TikTok’s global strategy and manage US e-commerce and advertising operations.
This structure helps explain the deal’s relatively modest valuation. The White House has said the agreement values TikTok’s US operations at $14 billion, far below earlier estimates of around $50 billion cited by analysts at Morningstar.
The key reason: control of TikTok’s revenue-generating businesses is not being transferred.
In effect, the deal addresses US national security concerns without fundamentally changing who runs TikTok’s global business, or who controls how the platform makes its money.
