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Trump backed TikTok's New American Owners · Elon Musk Podcast

• 0:01
  TikTok officially signed the deal to spin off its American
• 0:04
  operations to a group of US investors led by Oracle, Silver
• 0:09
  Lake and Abu Dhabi based MGX. The new joint venture gives
• 0:13
  American entities 80.1% ownership of the platform
• 0:17
  serving 170 million US users, while White Dance keeps 19.9%,
• 0:23
  just one of a percent point below the legal cap that would
• 0:27
  trigger a ban on the app. Now the deal closes a chapter
• 0:31
  that started with bipartisan legislation, survived a Supreme
• 0:35
  Court challenge and forced the app to go dark for 14 hours last
• 0:39
  January. But did Congress actually get
• 0:42
  what it wanted when it passed that law?
• 0:45
  Now it will license its algorithm to the new American
• 0:47
  entity, and Oracle will retrain it using only US user data.
• 0:52
  We're going to break down who owns what in this $14 billion
• 0:56
  venture, why critics say the deal may not satisfy the
• 0:59
  original long, and why Bytedance still controls Tiktok shop in
• 1:03
  advertising even after the spin off.
• 1:05
  And we'll get right into that right after this very short
• 1:09
  break. A Tiktok operates under a new
• 1:13
  corporate structure called Tiktok USDS Joint Venture LLC
• 1:18
  after both the Trump administration and the Chinese
• 1:20
  government signed off, and a presser who previously ran
• 1:23
  Tiktok's operations and trust and safety division takes over
• 1:27
  as the CEO of the ownership. Split into 3 tiers, Oracle,
• 1:32
  Silver Lake and MGX hold 15% each as managing investors with
• 1:37
  decision making power. Another 35.1 goes to 8
• 1:41
  investors, including Michael Dell's office, Susquehanna
• 1:45
  International Group and existing Bytedance backers like KKR and
• 1:49
  General Atlantic. Bytedance retains 19.9%.
• 1:54
  Vice President JD Vance cited a $14 billion valuation, though by
• 1:58
  Dance as a whole is worth 480 billion.
• 2:02
  The deal bundles in Cap Cut and Lemon 8.
• 2:05
  Alongside TikTok, Oracle will store all US user data in its
• 2:10
  domestic cloud, review source code continuously, and retrain
• 2:15
  the recommendation algorithm exclusively on American data.
• 2:20
  That retraining could take months and may produce different
• 2:22
  content, patterns and users currently experience.
• 2:26
  Larry Ellison, Oracle's Co founder and Trump supporter,
• 2:29
  positioned the company as Tik Tok's trusted security partner.
• 2:33
  The seven member board leans American with six US residents,
• 2:37
  though global TikTok CEO Xiaochu gets a seat alongside executives
• 2:42
  from Oracle, Silverlake and MGX. The legal question centers on
• 2:46
  whether the structure actually compliance with the 2024 law.
• 2:50
  Congress prohibited any operational relationship between
• 2:53
  Bytedance in a new ownership group, explicitly barring
• 2:56
  cooperation in the algorithm. Bytedance licensing that
• 3:00
  algorithm to the US entity may not satisfy that requirement.
• 3:04
  The Justice Department argued in a July 2024 filing that ensuring
• 3:09
  compliance, which require resources far beyond what the
• 3:12
  government and Oracle possess. Tik Tok's lawyers counted that
• 3:15
  rebuilding the algorithm from scratch would take years.
• 3:19
  Congress left it to the president to decide what
• 3:21
  qualifies as legitimate diversification, giving Trump
• 3:25
  wide latitude. Now Bytedance retains control
• 3:29
  over significant business operations beyond its ownership
• 3:33
  stake. TikTok Shop, the fast growing
• 3:35
  e-commerce feature, stays under Bytedance control.
• 3:38
  The advertising division generating billions from
• 3:41
  American brands also remains with the Chinese parent in the
• 3:44
  US entity handles data protection, content moderation
• 3:48
  and algorithm security. But the commercial engine runs
• 3:52
  through Byte Dance. Georgetown law professor Atapan
• 3:56
  Chandler raised a different concern.
• 3:58
  They said American investors now control who sees what on TikTok
• 4:02
  in the United States. The algorithm surfacing videos
• 4:04
  to 170 million Americans will answer to a board that includes
• 4:08
  major Trump supporters with their own political and
• 4:12
  commercial agendas. The deal may address fears about
• 4:15
  Chinese influence by concentrating the same power of
• 4:18
  that influence into American influence.
• 4:22
  President Trump celebrated on true social, thanking Xi Jinping
• 4:26
  for approving the deal and crediting TikTok with helping
• 4:28
  him win the youth vote in 2024. The saga that began when he
• 4:32
  tried to ban TikTok in 2020 ended with a deal that keeps
• 4:35
  Byte Dance involved while transferring majority control to
• 4:39
  his allies. Republican Representative John
• 4:42
  Molinar, who chairs the House China Committee, said his panel
• 4:46
  will hold hearings to examine whether the deal actually
• 4:49
  prevents CCP influence over the algorithm.
• 4:52
  The Tik Tok's US spin off closes the five year geopolitical
• 4:56
  battle. Oracle Silver Lake in MGX
• 5:00
  control 45% of the new venture, while Bytedance at 19.9.
• 5:04
  The algorithm will be retrained on American data in Oracle's
• 5:08
  cloud. The Bytedance keeps e-commerce
• 5:11
  and advertising credits. Question whether the deal
• 5:14
  satisfies Congress prohibition on operational relationships and
• 5:18
  house hearings. Will examine the arrangement
• 5:21
  very soon. We're going to see where this
• 5:23
  heads. Stay tuned For more information
• 5:25
  on this. We're going to have it as it
• 5:26
  develops. And if you found this breakdown
• 5:29
  useful, the best way to support the show is through our Patreon,
• 5:32
  thepatreon.com/stage Zero Studio.
• 5:36
  I've been an independent journalist covering Elon Musk,
• 5:38
  SpaceX, NASA, Space Flight, Tesla, XAI X and tech for the
• 5:45
  last six or seven years and your support keeps this whole program
• 5:48
  going. O hit the follow subscribe
• 5:50
  button on whatever platform you're on right now and that'll
• 5:53
  help as well. I'm very grateful to have you in
• 5:55
  this community. Thank you again.
• 5:57
  Take Care now.