Including Abu Dhabi’s MGX, a group of investors finally bought TikTok’s US operations

TikTok has agreed to sell its US operations to a joint venture led by American investors, which includes an Abu Dhabi-based company, according to Axios. The move is intended to address long-standing US national security concerns surrounding the widely used video-sharing platform.

In a memo, TikTok Chief Executive Shou Chew said the transaction is expected to be completed on Jan. 22.

Under the terms of the deal, Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment company MGX will collectively own 45% of the new US entity, which will operate as “TikTok USDS Joint Venture LLC”. Affiliates of existing ByteDance investors will hold close to one-third of the company, while ByteDance’s ownership stake will fall to just under 20%, according to the memo.

The newly formed US joint venture will take responsibility for safeguarding US user data, securing TikTok’s recommendation algorithm, overseeing content moderation, and ensuring the integrity of the platform’s software. As part of the arrangement, the recommendation algorithm will be retrained on US user data to prevent what the memo described as “outside manipulation.”

After the deal closes, the US joint venture will operate as an independent entity with authority over data protection and security matters in the United States. TikTok’s global operations will continue to handle product interoperability and certain commercial functions, including advertising, marketing, and e-commerce activities, according to the memo.

Axios reported that the agreement values TikTok’s US business at approximately $14 billion.

The deal follows months of negotiations involving the US government and ByteDance. In September, the White House and the Chinese government reached a preliminary agreement that would allow TikTok’s US operations to be sold to a US-controlled investor group led by Andreessen Horowitz, Silver Lake, and Oracle.

The sale finally puts an end to a 5+ years saga of US scrutiny that started with US President Donald Trump at the end of his first term in office. It’s worth noting that TikTok is the only non-US-owned major social media platform.