The biggest US investors in TikTok’s owner ByteDance are exploring a deal alongside software giant Oracle designed to assure President Donald Trump that the viral video app is free of Chinese control.
Under the plan, existing backers of ByteDance including General Atlantic, Susquehanna, KKR and Coatue will seek to acquire additional stakes in a spun-off TikTok US business, according to multiple people familiar with the talks. Oracle would also potentially take a small holding in the business and secure the US app’s data.
These financial institutions would look to buy out Chinese investors from the TikTok US business, one of the people said.
However, ByteDance would look to maintain a stake in the app’s US arm, said another person, adding the exact structure of the deal remains fluid and other investors could also be brought in.
The discussions come as TikTok faces an April 5 deadline for a federal law that will ban the app in the country unless its Beijing-based owner sells the US arm to non-Chinese entities.
The legislation, which was introduced by Congress over national security concerns, initially came into force in January, forcing the app to go dark temporarily for its 170mn US users.
However, the app’s service swiftly returned after Trump signed an executive order extending the deadline for a deal to be struck by 75 days, and stated that he wanted the US to have a “50 per cent ownership position in a joint venture”.
ByteDance strongly prefers the deal structure centred on Oracle than others that are circulating, according to one person familiar with the matter. TikTok declined to comment.
Since Trump extended the deadline on the ban, the White House has taken the unusual role of acting as the intermediary on any potential deal, inviting groups to submit potential bids for TikTok US.
Last week, Trump said that his administration was now in discussions with “four different groups” who were potential buyers.
Any deal would require approval from Trump, as well as ByteDance and the Chinese government, which previously threatened to block any deal but has since softened its stance.
Oracle, co-founded by Trump ally Larry Ellison, has emerged as a leading suitor, said multiple people with knowledge of the matter. The software group already struck a deal with TikTok in 2020, known as Project Texas, to store the personal data of American users in its US-based cloud servers.
Under a deal proposal together with US investors, Oracle would provide security assurances that US TikTok users’ data was safe. It could then allow ByteDance to continue to operate its highly sought-after algorithm, which has been a key demand of the Chinese government.
US investors are prepared to increase their investment and support the Oracle bid, in order to protect their economic interests, people said. In January, Bill Ford, chief of General Atlantic and ByteDance board member, said he had a “sense of optimism” that a deal would be done.
However, the full ownership structure remains unclear, such as whether ByteDance would continue to have access to TikTok’s profits, according to one person familiar with the discussions.
TikTok has previously said 60 per cent of ByteDance shares are owned by global investors, while 20 per cent are owned by employees and a further 20 per cent by its founder Zhang Yiming.
Oracle and Susquehanna did not immediately respond to a request for comment. General Atlantic, KKR and Coatue declined to comment.
Among the other public bidders are Frank McCourt, an American media and sports businessman, and Reddit co-founder Alexis Ohanian, who have established a consortium of investors that would bid for TikTok through his non-profit entity, Project Liberty.
Another bid has been submitted to the White House from chief executive of wealth management company Omnivest Financial Reid Rasner. The Wyoming billionaire told the Financial Times that he had secured nearly $50bn in soft commitments from American private equity firms to acquire the US app in full.
Many US politicians and security officials believe China’s government could use it to access the personal information of millions of American citizens, facilitate espionage and wield the app’s algorithm to spread propaganda. TikTok denies that Beijing has any control over the app.
Vice-president JD Vance last week said that he expected there to be a “high-level agreement” by the April 5 deadline on a deal that “satisfies our national security concerns, allows there to be a distinct American TikTok enterprise”.
By Hannah Murphy in San Francisco, Ivan Levingston in Zurich, Zijing Wu in Hong Kong, Harriet Agnew in London, James Fontanella-Khan and Antoine Gara in New York, and Alex Rogers in Washington DC.
Additional reporting by Ryan McMorrow in Beijing, George Hammond and Rafe Uddin in San Francisco and Demetri Sevastopulo in Washington DC.
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