Trump announces that the Chinese leader has agreed to a TikTok deal
In a significant development, TikTok, the popular short-video app, has announced a new US subsidiary, with US investors Oracle, Silver Lake, and Andreessen Horowitz set to hold an 80% stake. This move comes after months of uncertainty regarding TikTok's future in the US, due to potential bans.
The remaining 20% of the new subsidiary will be held by Chinese shareholders, including Chinese President Xi Jinping's government, which has agreed to a deal over the app. This decision follows the law passed last year, which mandates that TikTok be sold by its parent company, Bytedance, or shut down in the US by January 19, 2025. However, it's worth noting that there was no basis for this extension in the law.
Bytedance, headquartered in Beijing, will retain its role as TikTok's technical service provider in the US, with founder Zhang Yiming maintaining control through shares with more voting rights, despite only holding a 20% stake. Oracle, backed by Trump supporter Larry Ellison, will also continue to play a significant role in TikTok's US operations.
The political landscape of tech giants has also shifted. Elon Musk, the tech billionaire who took over Twitter, was briefly a Trump advisor, and right-wing political voices have become more prominent on the platform. Similarly, Facebook's parent company, Meta, which includes Instagram, has seen its founder, Mark Zuckerberg, politically shift closer to the Republicans.
It's important to note that this situation should not affect the operation of the short video app outside the US, such as in Germany. Bytedance is based on the Cayman Islands and is 60% owned by international investors, which helps to separate its US operations from its Chinese roots.
The US government had previously spoken about a fundamental agreement on the future of TikTok in the US, and this new subsidiary seems to be a step towards that agreement. The future of TikTok in the US, once a source of controversy, now appears to be on a clearer path.
In conclusion, TikTok's future in the US has been clarified with the establishment of a new subsidiary, backed by US investors and subject to fewer Chinese regulations. The political landscape of tech giants, however, continues to evolve, with right-wing political voices becoming more prominent on platforms like Twitter and Facebook's founder, Mark Zuckerberg, shifting closer to the Republicans.
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