U.S. negotiators Trump and Xi to deliberate on TikTok acquisition deal
The fate of popular video-sharing app TikTok may be decided this week, as reports suggest a deal is in the works between a consortium led by software developer Oracle, venture capital firm Andreessen Horowitz, and investment company Silver Lake, and the Chinese parent company ByteDance.
The deal, which is still subject to review and approval by both US and Chinese governments, aims to secure the handling of US user data in Oracle's data centers in Texas. Oracle will continue providing cloud services for TikTok as part of the agreement.
Under the proposed framework agreement, ByteDance's stake in the new business will be reduced to just under 20%. Existing American investors will own around 30% of the new entity, while Oracle, Andreessen's venture fund, and Silver Lake will acquire 50% of TikTok's US business.
The new TikTok platform will reproduce the old recommendation algorithms, ensuring a familiar user experience for its millions of users. Upon completion of the deal, TikTok app users will transition to the new platform.
The consortium's leader in the sale of TikTok's US operations is the head of the Oracle-led consortium, but the exact name of this person is not yet publicly disclosed. ByteDance will license the technology underlying the new TikTok platform under the framework agreement.
It is important to note that any details of the framework agreement should be considered speculative until officially published by the administration. Representatives of TikTok, Oracle, Andreessen, and Silver Lake did not respond to requests for comment.
The new TikTok platform is currently being tested by American TikTok engineers. The deal is set to be discussed this week between US President Donald Trump and Chinese President Xi Jinping.
The reduction of ByteDance's stake allows it to comply with US securities ownership rules. The exact terms and conditions of the deal are not yet publicly disclosed. However, it is clear that this potential deal could mark a significant shift in the ownership and management of one of the world's most popular social media platforms.
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