President Donald Trump signed an executive order Thursday declaring that a plan for TikTok‘s Chinese owner ByteDance to divest the U.S. operations of the wildly popular video app meets the requirements of a 2024 law.
In recent weeks, there have been reports that a consortium including Oracle chairman Larry Ellison and Dell Technologies CEO Michael Dell would be part of a group to take control of TikTok’s U.S. operations via a joint venture. Fox Corp. also is in talks to become a backer.
White House Press Secretary Karoline Leavitt has said control of the algorithm behind the hugely popular social video app will now belong to the U.S.-owned venture. ByteDance will still own 19.9% of the JV and its current investors will retain 35% of the new entity.
Data will be managed by Oracle, which already has a cloud deal with the platform owned by Chinese conglomerate ByteDance. Leavitt told Fox News that the board would have seven members, including six Americans.
Ellison – the first or second richest person on the planet depending on the week – is the father of David Ellison and main backer of Skydance Media, which recently acquired Paramount and is exploring an offer for Warner Bros. Discovery. That would make Fox a second media powerhouse to enter the TikTok orbit.
The structure of the new consortium gives each member an equal share, meaning Ellison would not be able to fold the U.S. TikTok entity into Paramount, Wall Street analyst Rich Greenfield wrote in a blog post Thursday. After the transaction, he added, the user and advertising experiences would remain the same, and domestic users will not need to download a new app, at least initially. “While there is a slight chance a new app will ultimately be required, that new app would still incorporate all existing user information and behavior,” Greenfield noted.
Last year, Congress overwhelmingly passed a law that required ByteDance to divest the app in the U.S. or face a ban. The Supreme Court upheld the law in January, but Trump has extended the deadline several times.
Trump’s executive order extends the deadline yet again as the new business arrangement is worked out.
