US, China agree to spin off TikTok's US operation, White House official confirms

Core Viewpoint - The U.S. and China have reached an agreement on a TikTok U.S. spin-off deal, allowing the app to continue operating in the U.S. while addressing concerns regarding its Chinese parent company, ByteDance [1] Group 1: Joint Venture Structure - The new TikTok U.S. joint venture will be led by a mostly American investor group, including Oracle and Silver Lake, as announced by TikTok CEO Shou Chew [2] - ByteDance will retain a nearly 20% stake in the new U.S. entity, while Oracle, Silver Lake, and MGX will each hold 15% stakes [4] Group 2: Regulatory Concerns - The new entity aims to alleviate U.S. lawmakers' concerns about the Chinese government's potential influence over ByteDance, particularly regarding data access for the platform's 170 million American users [3] - The governance of the new entity will include a board with a majority of directors from the U.S., ensuring American control over operations [4] Group 3: Legislative Context - The deal's closing date is set for January 22, following an executive order signed by President Donald Trump that delayed the enforcement of a law requiring ByteDance to divest TikTok's U.S. business [7] - The bipartisan Protecting Americans from Foreign Adversary Controlled Applications Act bans social media apps linked to adversarial foreign governments from U.S. app stores, with the law taking effect in January 2025 [8] Group 4: Valuation and Security - The U.S. business of TikTok is valued at approximately $14 billion in the deal, with a focus on protecting American data security and ensuring continued access to the app [10] - Control over the algorithm by the American entity is emphasized as crucial for meeting national security requirements under the law [12]