Newly agreed TikTok deal raises questions

Samuel Buchmann

23.1.2026

Translation: Katherine Martin

TikTok’s US business is set to be split from its Chinese parent company. The majority of it will go to investors close to President Donald Trump – conceivably at a ridiculously low price. Here’s the lowdown.

The announced deal to reorganise TikTok in the US has now become a reality, ending years of political and legal wrangling. Bytedance, TikTok’s Chinese parent company, is set to transfer its US operations to a new company primarily owned by non-Chinese investors. These include Oracle, private equity firm Silver Lake and Abu Dhabi-based investment company MGX. Each of these parties holds a 15 per cent stake, while further shares will go to smaller investors such as billionaire Michael Dell. ByteDance will remain a minority shareholder, with a stake of just under 20 per cent.

This setup allows the app to swerve the US ban it was threatened with in 2024. The new US subsidiary will have a majority American supervisory board and its own CEO – former TikTok manager Adam Presser. Oracle will provide cloud infrastructure, monitor the protection of US user data and reportedly review changes to the software. This also includes the mechanisms underpinning how content is displayed. The US government believes this meets the formal requirements of a «qualified divestiture».

Lack of clarity over independence

Whether or not that’s actually true is another matter. After all, ByteDance will retain control over TikTok’s algorithm, the true heart of the platform. The US company will merely be licensing it, giving it the green light to train it with US data. This raises questions about whether their «operational relationship» has genuinely ended within the meaning of the law. A licensing agreement would still leave room for manoeuvre on the rights holder’s end.

At an operational level, the separation means there’ll essentially be two TikTok versions in the future, each with technically and organisationally separate data streams: a US version with local data storage at Oracle and a global platform under ByteDance’s control. It’s still unclear whether – and to what extent – US users’ For You feeds will change as a result of retraining.

From propaganda shower to propaganda deluge?

On a political level, the deal might end up replacing old problems with new ones. It was previously feared that China could use TikTok to spread propaganda in the US. The thing is, the new investors are rumoured to have similar interests. Most of them maintain close relationships with Donald Trump and his entourage, with Oracle’s owner Larry Ellison being the prime example. The US President himself has hailed the agreement as «saving» TikTok, describing it as an «important voice» that now belongs to «patriotic investors».

The new owners have announced they won’t have direct editorial control over TikTok. However, through data access and content moderation guidelines, they’ll be able to indirectly set the conditions for what content appears prominently in feeds or disappears altogether. It’s also still unclear how much information will flow between the US subsidiary, Oracle and government agencies. The White House has stated that the new structure will serve «national security interests», an argument that could be misused to align users’ feeds with the political priorities of the current government.

Shares likely snapped up at bargain-basement price

On a financial level, there are suspicions that the TikTok deal is a lesson in kleptocracy. The American government was the sole decider in determining who’d own the US subsidiary, with investors on good terms with the president proving to be the main beneficiaries. For them, the investment’s likely to be extremely lucrative. Although the sale price was never officially announced, Vice President JD Vance referred to a figure of 14 billion US dollars in September.

If correct, that’d mean Larry Ellison and co. snapped up TikTok’s US business at an absurdly low price. Fourteen billion barely corresponds to three per cent of Bytedance’s estimated value. On private markets, the company’s valued at 480 billion. And even that figure seems low when you consider competitor Meta’s market capitalisation is more than triple that. Such a laughably low price can only be the result of political pressure. If the new owners were to sell their shares tomorrow, they’d make their money back multiple times over on the open market.

Samuel Buchmann

Senior Editor

Samuel.Buchmann@digitecgalaxus.ch

My fingerprint often changes so drastically that my MacBook doesn't recognise it anymore. The reason? If I'm not clinging to a monitor or camera, I'm probably clinging to a rockface by the tips of my fingers.

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