Deal marks milestone for TikTok after political battles since Aug 2020 Trump ban push. Global shift
TikTok logo is displayed outside its office in Culver City, California. Photo: AFP
TikTok’s Chinese owner ByteDance said on Thursday it has finalized a deal to establish a majority Ameri
can-owned joint venture to secure US user data, avoiding a potential ban of the short-video app used by more than 200 million Americans.
The agreement marks a milestone for TikTok after years of political and legal battles that began in August 2020, when then-President Donald Trump sought to ban the app over national security concerns.
Trump later opted not to enforce a law passed in April 2024 requiring ByteDance to sell its US assets by January 2025 or face a ban, a measure that was upheld by the Supreme Court.
ByteDance said the new entity, TikTok USDS Joint Venture LLC, will secure US user data, apps and algorithms through enhanced data privacy and cybersecurity protections. The company disclosed few details about the divestiture.
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Trump praised the deal in a social media post, saying TikTok “will now be owned by a group of Great American Patriots and Investors, the Biggest in the World.” He also thanked Chinese President Xi Jinping “for working with us and, ultimately, approving the Deal.”
Under the agreement, American and global investors will hold 80.1% of the venture, while ByteDance will retain a 19.9% stake.
The joint venture’s three managing investors – cloud computing company Oracle, private equity firm Silver Lake and Abu Dhabi-based investment firm MGX – will each hold 15%.
A White House official told Reuters that both the US and Chinese governments had signed off on the deal. The Chinese Embassy in Washington did not immediately comment.
Trump said last year the agreement met the divestiture requirements under the 2024 law. The White House said in September that the venture would operate TikTok’s US app, though key elements of the business relationship between ByteDance and the venture have not been disclosed.
Trump has more than 16 million followers on his personal TikTok account and has credited the app with helping him win reelection. The White House launched an official TikTok account in August.
TikTok said additional investors in the venture include Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Former TikTok USDS executives Adam Presser and Will Farrell have been appointed chief executive officer and chief security officer, respectively. TikTok CEO Shou Chew was also named to the venture’s board.
The joint venture will retrain, test and update TikTok’s content recommendation algorithm using US user data, with the algorithm secured in Oracle’s US-based cloud infrastructure.
In September, Reuters reported that ByteDance would maintain ownership of TikTok’s US business operations while ceding control of the app’s data, content and algorithm to the joint venture.
The venture will serve as backend operations for the US company, handling user data and algorithms, while a separate ByteDance-owned unit will control revenue-generating operations such as advertising and e-commerce, the sources said.
The new venture will receive a portion of revenue for its technology and data services, they added.
