The Abu Dhabi royal family is set to make a significant move in the tech landscape by acquiring a stake in TikTok’s US operations. This development follows an executive order signed by former President Donald Trump, which facilitates a deal that values the popular social media platform at approximately $14 billion (£10.5 billion). The investment will be made through MGX, a fund chaired by Sheikh Tahnoon bin Zayed Al Nahyan, which will secure a 15% stake in TikTok US and a board seat once the American division is officially spun out.
On Thursday night, Trump approved the executive order, granting a 120-day window to finalize the agreement. This strategic move aims to ensure that TikTok US is predominantly owned by American entities. Alongside MGX, other key players involved in the acquisition include Larry Ellison’s Oracle and the private equity firm Silver Lake, collectively controlling around 45% of TikTok US. Overall, American investors are anticipated to hold just over 65% of the company, with notable figures like Michael Dell and Rupert Murdoch’s Fox also contributing to the investment.
Trump emphasized the importance of American ownership, stating, “TikTok US will be majority-owned and controlled by United States persons and will no longer be controlled by any foreign adversary.” He praised the sophistication of the American investors involved, highlighting that they include some of the most prominent figures in the tech industry. This transition aims to reassure users that TikTok will be American-operated, with a focus on safeguarding user data.
Despite the changes, TikTok’s Chinese parent company, ByteDance, will retain a 19.9% stake in the US operations. The Chinese government has not publicly clarified its stance on the deal; however, Trump mentioned having a positive conversation with Chinese President Xi Jinping, who reportedly gave the deal his approval. JD Vance, the US Vice President, acknowledged the deal's significance, stating that it valued TikTok US at $14 billion and emphasized the necessity of protecting American data privacy.
While the $14 billion valuation for TikTok US seems substantial, it pales in comparison to ByteDance's overall estimated valuation of $330 billion. For context, Meta Platforms, which owns Facebook and Instagram, boasts a market value of approximately $1.8 trillion. The uncertainty surrounding TikTok US had been prevalent since last April, when Congress enacted legislation requiring ByteDance to divest its ownership due to privacy and national security concerns. Trump had previously extended deadlines for the sale, emphasizing the urgency of reaching an agreement to avoid a potential shutdown of TikTok US.
This landmark deal marks a pivotal moment for TikTok, its users, and the broader conversation around data privacy and corporate ownership in the evolving landscape of social media. As the details continue to unfold, stakeholders are keenly observing how this investment will reshape the future of TikTok in the United States.
