Non-Chinese ByteDance investors emerge as front-runners
NEW YORK — White House-led talks on the future of TikTok are coalescing around a plan for the biggest non-Chinese investors in parent company ByteDance to up their stakes and acquire the short video app’s US operations, according to two sources familiar with the discussions.
The plan entails spinning off a US entity for TikTok and diluting Chinese ownership in the new business to below the 20 percent threshold required by US law, rescuing the app from a looming US ban, said the sources, who asked to be kept anonymous because they were not authorized to speak on record.
Jeff Yass’ Susquehanna International Group and Bill Ford’s General Atlantic, both of which are represented on ByteDance’s board, are leading discussions with the White House on the plan, the sources said.
Private equity firm KKR is also participating, one of the sources said.
The fate of the short video app used by nearly half of all Americans has been up in the air since a law took effect on Jan. 19 requiring ByteDance to either sell it or face a ban on national security grounds.
The law, passed last year with broad bipartisan support, reflects concern in Washington that TikTok’s ownership makes it beholden to the Chinese government and that Beijing could use the app to conduct influence operations against the United States.
First Amendment
Free speech advocates have argued that the ban unlawfully threatens to restrict Americans from accessing foreign media in violation of the First Amendment of the US Constitution.
The company has said US officials have misstated its ties to China, arguing its content recommendation engine and user data are stored in the United States on cloud servers operated by Oracle while content moderation decisions that affect American users are also made in the US.
Under the plan proposed by existing investors, software giant Oracle would continue to house US user data and provide assurances that the data is not accessible from China, this source added.
Representatives for TikTok, ByteDance, Susquehanna, Oracle and the White House could not immediately be reached for comment.
General Atlantic and KKR declined to comment.
According to legal filings from TikTok last year, global investors own about 58 percent of ByteDance, while the company’s Singapore-based Chinese founder Zhang Yiming owns another 21 percent and employees of different nationalities — including about 7,000 Americans — own the remaining 21 percent.
Others vying to acquire the app include an investor group led by billionaire Frank McCourt and another involving Jimmy Donaldson, better known as the YouTube star Mr. Beast.
