TikTok’s Lawless Days to End in January as U.S. Business Will Be Spun Off ⇥ cnbc.com

Jonathan Vanian and Julia Boorstin, CNBC:

TikTok CEO Shou Zi Chew told employees on Thursday that the company’s U.S. operations will be housed in a new joint venture.

[…]

The U.S. joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX, with 15% each. Just over 30% will be held by affiliates of certain existing investors of ByteDance, and almost 20% will be retained by ByteDance, the memo said.

Oracle is among the companies illegally supporting TikTok for the past year, along with Apple and Google. Instead of facing stiff legal penalties, Oracle will get to own a 15% piece of TikTok. It probably helps that co-founder Larry Ellison is a friend and donor to Donald Trump.

MGX will also get a 15% share. It is a state-run investment fund in the United Arab Emirates, even though I thought the whole point of this deal was a collective panic over foreign government interference. It probably helps that MGX used Trump’s family cryptocurrency to invest in Binance.

The deal is structured so these firms — and Silver Lake — actually have control. But, after all this, it seems like the single biggest shareholder in this new entity will be Bytedance, with 19.9%.

CNBC:

The new TikTok entity will also be tasked with retraining the video app’s core content recommendation algorithm “on U.S. user data to ensure the content feed is free from outside manipulation,” the memo said.

I do not think it is worth reading too much into TikTok’s CEO writing that its new suggestions will be “free from outside manipulation”, or the implications that statement indicates for TikTok’s operations elsewhere.

Bobby Allyn, NPR:

Yet the underlying algorithm will still be owned by Beijing-based ByteDance, with the blessing of American auditors, according to an internal TikTok memo reviewed by NPR and two sources familiar with the deal who were not authorized to speak publicly.

So if the underlying recommendations system still has connections to China, but it is retrained by a company run by a mix of far-right U.S. investors and a different foreign government, are those the ingredients for a social network with less state influence? Does this satisfy those who believe, without evidence, that TikTok is brainwashing people in the U.S. at the behest of the Chinese government?