WASHINGTON, Jan 23 (ABC): TikTok’s Chinese parent ByteDance has said it has finalised a deal to create a majority American-owned joint venture aimed at securing US user data and avoiding a nationwide ban on the popular short-video app, which is used by more than 200 million Americans.
The agreement marks a major milestone for TikTok after years of scrutiny over national security concerns that intensified in August 2020, when then-president Donald Trump sought to ban the app. A law passed in April 2024 required ByteDance to divest TikTok’s US assets or face a ban, a measure later upheld by the Supreme Court, though enforcement was ultimately paused.
Under the deal, TikTok USDS Joint Venture LLC will be responsible for safeguarding US user data, applications and algorithms through enhanced data-privacy and cybersecurity measures. ByteDance said American and global investors will hold 80.1% of the venture, while ByteDance will retain a 19.9% stake.
The three managing investors — Oracle, Silver Lake and Abu Dhabi-based MGX — will each hold 15%.
Trump welcomed the agreement in a social media post, saying TikTok would now be owned by “great American investors,” and thanked Xi Jinping for approving the deal. A White House official told Reuters that both the US and Chinese governments had signed off on the arrangement, while the Chinese embassy in Washington declined immediate comment.
The venture will operate TikTok’s US app and secure its content-recommendation algorithm within Oracle’s US-based cloud infrastructure. TikTok said the algorithm will be retrained and tested using US user data under the new framework.
Former TikTok USDS executives Adam Presser and Will Farrell have been appointed chief executive officer and chief security officer, respectively. TikTok CEO Shou Chew will also sit on the venture’s board.
Additional investors include Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital. Further details on commercial arrangements between the joint venture and ByteDance have not been disclosed.