The move comes after years of regulatory battles over concerns that U.S. user data could be accessed by the Chinese government.
The new entity, TikTok USDS Joint Venture LLC, will see American and global investors hold 80.1% of the company, while ByteDance retains a 19.9% stake. Key investors include cloud computing giant Oracle, private equity group Silver Lake, and Abu Dhabi-based MGX, each with a 15% share. Additional investors include the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, and several others.
Former TikTok executives Adam Presser and Will Farrell have been appointed CEO and chief security officer, respectively, with TikTok CEO Shou Chew joining the venture's board.
Under the agreement, TikTok's content recommendation algorithm will be retrained on U.S. user data and hosted on Oracle's U.S. cloud infrastructure. The venture will manage U.S. user data, content moderation, and related operations, while ByteDance will continue to oversee revenue-generating activities such as advertising and e-commerce. This separation is intended to meet U.S. regulatory requirements while preserving ByteDance's intellectual property.
The deal is a significant milestone for TikTok after years of scrutiny. In August 2020, President Donald Trump attempted to ban the app over national security concerns, citing fears that user data could be misused by the Chinese government.
A 2024 law later required ByteDance to divest its U.S. operations by January 2025 or face a ban, a provision upheld by the Supreme Court. The deadline was repeatedly extended, with the Biden administration and Trump ultimately agreeing to a joint venture structure.
Trump praised the agreement on social media, describing the new ownership as 'Great American Patriots and Investors, the Biggest in the World,' and thanked Chinese President Xi Jinping for approving the deal.
Wycliffe Nyamasege
Source : https://en.igihe.com/news/article/tiktok-and-u-s-investors-reach-deal-to-avert-potential-ban
