Dem
47
GOP
53
U.S. law required that the U.S. operations of TikTok be sold to an American entity many months ago. It didn't happen. Now a greatly watered down deal has happened. A new entity will be created to run the U.S. part of TikTok. Forty-five percent of that entity will be owned by a consortium consisting of investors, including Oracle, private equity firm Silver Lake, and a UAE state-backed firm called MGX. Another third will be held by existing investors in ByteDance, the Chinese firm that wrote the code and runs the app. Another 20% will be held by ByteDance itself. It wasn't specified who has the remaining 5%. A seven-member board will run the company.
However, the deal basically avoids the whole purpose of the law: To keep Americans' data out of the hands of the Chinese government. The deal essentially means that the Oracle/Silver Lake/MGX consortium will get 45% of the profits TikTok generates, the original ByteDance investors will get a third, and ByteDance will get 20%. But ByteDance will continue to own the algorithm and manage the operation. The problem with TikTok was who controls it, what algorithm does it use, and what happens to the data? It wasn't about who gets the profits, but that is all that has been changed with this deal.
The new board will have some say about censorship—that is, what is allowed and what is not allowed. This may be better than having a Chinese company do it. Maybe not. Oracle is controlled by Larry Ellison, a close buddy and strong supporter of Donald Trump. This deal enhances the Ellisons' role in the media. Ellison's son, David Ellison, runs Paramount, and wants to buy Warner Bros. Discovery, which also owns CNN. (V)