TikTok's U.S. Operations Valued at $140 Billion in Proposed Deal

TikTok's U.S. operations are under a proposed deal valued at $140 billion, with Oracle Corporation, Silver Lake, and MGX from the United Arab Emirates in discussions to invest in the business and secure seats on the board of directors. This deal, encouraged by the Trump administration, aims to ensure that TikTok's U.S. operations are controlled by non-Chinese entities. ByteDance, the parent company of TikTok, is expected to hold less than 20% of the shares in the new entity, which will be majority-owned by U.S. investors.

The proposed transaction is part of a broader effort to address national security concerns raised by the Trump administration regarding TikTok's operations in the United States. The deal is expected to be completed within 120 days, as mandated by a Trump executive order. However, it remains unclear whether the Chinese government will approve the plan.

Oracle, Silver Lake, and MGX are each expected to hold approximately 15% of the shares in the new entity and secure one seat on the board of directors each. The exact shareholding percentages may be adjusted as negotiations progress. The deal is a response to Trump's demand that ByteDance sell TikTok's U.S. operations to American investors. Under the proposed agreement, ByteDance's shareholding will be reduced to less than 20% to comply with U.S. legal requirements, or else face a nationwide ban.

MGX, a joint venture between Mubadala Investment Company and technology giant G42, has already invested in several high-profile companies, including OpenAI and Databricks. The entity is led by Sheikh Tahnoon bin Zayed Al Nahyan, the national security advisor and brother of the UAE president, and manages a vast industrial empire worth $1.5 trillion. MGX is currently raising tens of billions of dollars in third-party funds for investments in the artificial intelligence sector.

The proposed deal has sparked debate among analysts, with some suggesting that the $140 billion valuation is significantly lower than expected. However, the exact details of the transaction and the final valuation remain subject to negotiation and approval by all parties involved. The final investment amount and valuation will be determined by the investors, with potential resistance from the Chinese side. The deal is part of a broader effort to address national security concerns raised by the Trump administration regarding TikTok's operations in the United States. The proposed transaction is expected to be completed within 120 days, as mandated by a Trump executive order. However, it remains unclear whether the Chinese government will approve the plan.