TikTok has finalized an agreement to establish a majority American-owned joint venture designed to safeguard US user data, potentially averting a ban of the short-video platform in the United States. The move follows years of political scrutiny that began in August 2020 when former President Donald Trump sought to prohibit the app over national security concerns. While Trump did not enforce the law requiring ByteDance to divest US assets by January 2025, a measure upheld by the Supreme Court, the new joint venture ensures compliance with regulations while allowing TikTok to continue operating for its more than 200 million US users.
Under the agreement, ByteDance will retain a 19.9% stake in the newly formed TikTok USDS Joint Venture LLC, while American and global investors will hold 80.1%. Key managing investors include Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment firm MGX, each with a 15% share. Other contributors to the venture are Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital. The arrangement is structured to separate US user data, apps, and algorithms from ByteDance’s broader operations, with Oracle hosting the content recommendation algorithm in its US-based cloud infrastructure.
TikTok confirmed that former USDS executives Adam Presser and Will Farrell will serve as chief executive officer and chief security officer, respectively, while TikTok CEO Shou Chew joins the venture’s board. The joint venture will oversee the training, testing, and updating of the content recommendation algorithm using US user data. Meanwhile, ByteDance will maintain control over revenue-generating operations including advertising and e-commerce. The venture will receive a portion of revenue for providing technology and data services, supporting the backend operations necessary for TikTok’s continued presence in the United States.
The US and Chinese governments have both approved the deal, reflecting a cooperative effort to address longstanding concerns regarding data privacy and security. Former President Trump welcomed the agreement, noting that TikTok would now be majority-owned by American investors, while also acknowledging Chinese President Xi Jinping for facilitating the arrangement. The new structure aims to provide robust data privacy protections while allowing TikTok to continue engaging US users, including high-profile figures and organizations that have actively used the platform. This joint venture represents a significant step in navigating regulatory requirements while sustaining the platform’s operations in the US market.
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