TikTok has announced the creation of a majority American-owned joint venture to oversee its operations in the United States, a move designed to prevent a government ban linked to its Chinese ownership.
New Joint Venture Structure
The newly formed entity, TikTok USDS Joint Venture LLC, will serve over 200 million users and 7.5 million businesses across the US. The company emphasized that this structure includes rigorous safeguards for data security and content moderation.
Ownership and Investment Details
- ByteDance, TikTok’s Chinese parent company, retains a 19.9% stake, keeping below the 20% limit set by US law.
- Three major investors—Silver Lake, Oracle, and Abu Dhabi-based AI fund MGX—each hold 15% stakes.
- Additional investors include Dell Family Office, affiliates of Susquehanna International Group, and General Atlantic.
Governance and Operations
The joint venture will be governed by a seven-member board with a majority of American members, including TikTok CEO Shou Chew and executives from the investment firms. Adam Presser has been named CEO of the new entity, while Will Farrell will serve as chief security officer.
Decision-making authority over trust, safety policies, and content moderation for US users will remain with the joint venture. Meanwhile, TikTok’s global operations will continue managing international product integration and commercial activities such as e-commerce and advertising.
Data Security Measures
US user data will be stored securely on Oracle’s cloud platform, with cybersecurity protocols audited by independent third parties to meet federal standards.
Political Context and Reactions
The joint venture arrangement responds to a US law passed under Former President Joe Biden’s administration, which requires ByteDance to divest TikTok’s US operations or face a ban. President Donald Trump, who delayed enforcement during his term, welcomed the deal and thanked Chinese President Xi Jinping for approving it.
Trump stated that TikTok will now be owned by “a group of Great American Patriots and Investors” and described the platform as an important voice.
Industry Perspectives
Jasmine Enberg, co-CEO of a media company specializing in the creator economy, noted that while users may be reassured by the deal, uncertainties remain about its full implications. Advertisers will likely seek assurance that their campaigns and strategies on TikTok will continue without disruption.
Key Figures and Future Outlook
Oracle’s executive chairman, Larry Ellison, a known ally of Trump, is a significant figure in the joint venture. The valuation of the US entity has been estimated at around $14 billion, though final pricing will depend on investor decisions.
The deal largely aligns with plans previously shared internally by TikTok’s CEO and reflects ongoing efforts to address US government concerns over data privacy and national security risks associated with Chinese ownership.
