Proposal Would Hand TikTok’s US Presence to American Investors
TikTok will still feel familiar to the 170 million Americans who scroll through it every day, but the company behind the app would be restructured under a proposal being considered Tuesday (Sept. 16).
The plan, under discussion by the U.S. and China this week, would shift a majority ownership to U.S. investors, secure data oversight in Texas, and license the algorithm into American hands, reshaping control without changing the feed. For users, the experience remains seamless, while ownership, governance and technology move under a new framework.
The proposal, The Wall Street Journal said, is that investors led by Oracle, Silver Lake and Andreessen Horowitz would hold roughly 80% ownership of a U.S.-based TikTok entity. ByteDance’s Chinese shareholders would retain just under 20%, enough to remain invested but not enough to steer the company. Supervisory control would rest with a U.S.-majority board that includes a government-appointed director. Oracle would continue hosting U.S. user data in Texas. The algorithm, the unseen engine behind TikTok’s influence, will be licensed from ByteDance and re-created by U.S. engineers.
This marks a shift from earlier plans. As PYMNTS reported, TikTok had been preparing to move U.S. users to a new version of the app, code-named “M2,” ahead of a planned sale. That plan involved a separate download and a dual-app period until 2026. The current framework takes a different approach, preserving the front-end app while reworking the infrastructure that governs ownership, data and algorithms.
China’s regulators, once reluctant to let core technology leave, have confirmed they will allow the licensing of TikTok’s algorithm and related intellectual property. This compromise allows ByteDance to keep a minority stake while ceding day-to-day control of U.S. operations. PYMNTS has tracked similar balancing acts in payments and tech partnerships, where the tension between national security and innovation often shapes the terms of market entry.
The deadline to finalize the deal is Dec. 16, to give negotiators time to complete the transition. Open questions remain over governance enforcement, algorithmic transparency and how users will be migrated to the updated app. Those questions echo recent PYMNTS reporting on TikTok’s U.S. transition, which highlights the challenges of migrating millions of users onto a new structure without disrupting engagement.
As PYMNTS coverage of platform governance has noted, the user experience often masks a far more complex restructuring of the business model, one that can determine whether innovation thrives or stalls.
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