BY MIRABEL ODETA
TikTok’s Chinese parent company, ByteDance, said on Thursday it has finalized a deal to create a new joint venture that will be majority owned by American and global investors, a move aimed at safeguarding U.S. user data and preventing a nationwide ban of the hugely popular short-video app used by more than 200 million Americans.
The agreement marks a major turning point in a long-running political and regulatory battle that dates back to August 2020, when then-President Donald Trump first sought to ban TikTok over concerns that U.S. user data could be accessed by the Chinese government.
Those concerns persisted across multiple administrations and eventually culminated in legislation passed in April 2024 requiring ByteDance to divest its U.S. TikTok assets by January 2025 or face a ban. The law was later upheld by the Supreme Court, significantly raising pressure on the company to reach a deal.
Under the finalized arrangement, a new entity called TikTok USDS Joint Venture LLC will be responsible for securing U.S. user data, applications and algorithms through enhanced data privacy and cybersecurity measures. ByteDance said the structure of the deal ensures that TikTok’s U.S. operations will be insulated from foreign influence, though it offered limited details on the full scope of the divestiture.
President Trump praised the agreement in a post on social media, calling it a win for American investors and national security. He said TikTok “will now be owned by a group of Great American Patriots and Investors, the biggest in the world,” and publicly thanked Chinese President Xi Jinping for approving the deal. Trump added that Xi could have rejected the arrangement but chose cooperation instead.
According to ByteDance, American and global investors will collectively hold 80.1% of the new 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 own 15% stakes.
U.S. officials confirmed that both Washington and Beijing signed off on the agreement, signaling rare alignment between the two governments on a highly sensitive technology issue. Chinese officials did not immediately comment publicly on the approval.
Trump had previously indicated that the deal satisfied the divestiture requirements set out in the 2024 law, and the White House said last September that the new venture would operate TikTok’s U.S. app. However, many commercial and governance details have remained undisclosed, including the precise business relationship between the joint venture and ByteDance’s remaining global operations.
The president himself has a strong presence on TikTok, with more than 16 million followers, and has credited the platform with helping him secure reelection. In December, TikTok reportedly provided the White House with internal data highlighting Trump’s popularity on the app. The administration also launched an official TikTok account in August, underscoring the platform’s growing political relevance despite years of scrutiny.
ByteDance said additional investors in the venture include the Dell Family Office, affiliated with Dell Technologies founder Michael Dell, as well as Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Leadership appointments were also announced, with former TikTok USDS executives Adam Presser and Will Farrell named chief executive officer and chief security officer, respectively. TikTok CEO Shou Chew will serve on the board of the new venture while continuing to oversee the company’s global strategy and operations.
As part of the new structure, the joint venture will retrain, test and update TikTok’s content recommendation algorithm using U.S. user data. The algorithm will be secured within Oracle’s U.S.-based cloud infrastructure, a key component designed to address longstanding concerns over data access and control.
Earlier reports had indicated that ByteDance would retain ownership of TikTok’s U.S. business operations while ceding control over user data, content moderation and the recommendation algorithm to the new venture. The joint venture is expected to function as the backend technology and data services provider for TikTok’s U.S. platform, while a separate ByteDance-owned division will continue to manage revenue-generating activities such as advertising and e-commerce.
Sources familiar with the matter have suggested that the new venture will receive a portion of TikTok’s revenue in exchange for its technology and data services, further formalizing the separation between U.S. data operations and ByteDance’s broader global business.
Original article
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