White House-Led Talks Focus on U.S. Investor Takeover of TikTok

Discussions led by the White House regarding the future of TikTok are centering on a proposal for major U.S.-based investors in parent company ByteDance to increase their stakes and acquire the app’s U.S. operations, according to Reuters. Two sources familiar with the negotiations indicated that the plan aims to separate TikTok’s U.S. entity from its Chinese ownership to comply with national security concerns.

Per Reuters, the proposal would establish a U.S. entity for TikTok, reducing Chinese ownership in the new business to below 20 percent. This restructuring is intended to prevent the app from being banned under U.S. law, which mandates ByteDance divest from TikTok’s American operations or face prohibition. The sources, who requested anonymity due to the sensitivity of the talks, revealed that investment firms Susquehanna International Group and General Atlantic, both of which hold seats on ByteDance’s board, are leading negotiations with the White House.

Read more: Oracle Weighs National Security Risks in TikTok’s US Operations Sale

Additionally, one of the sources told Reuters that private equity firm KKR is also participating in the discussions. The fate of TikTok, which is used by nearly half of all Americans, has been uncertain since a law passed last year came into effect on January 19. The legislation, which received strong bipartisan support, reflects concerns that TikTok’s Chinese ownership could allow Beijing to leverage the platform for influence operations against the U.S.

Advocates for free speech have raised objections, arguing that the ban could unlawfully restrict Americans’ access to foreign media, potentially violating the First Amendment of the U.S. Constitution. TikTok, for its part, has maintained that U.S. officials have mischaracterized its ties to China. The company asserts that its recommendation algorithms and user data are stored on Oracle-managed cloud servers in the U.S., and that content moderation decisions for American users are made domestically.

As part of the proposed investor-led plan, Oracle would continue to house TikTok’s U.S. user data and ensure that it remains inaccessible from China, according to one of the sources cited by Reuters.

Source: Reuters,