TikTok’s Chinese parent company, ByteDance, has finalized a deal to establish a majority American-owned joint venture aimed at securing US user data and avoiding a potential ban on the popular short video app used by over 200 million Americans.
Details of the Joint Venture
The new entity, TikTok USDS Joint Venture LLC, will implement data privacy and cybersecurity measures to protect US user data, apps, and algorithms. Under the agreement, American and global investors will hold 80.1% of the venture, while ByteDance will retain a 19.9% stake.
Key managing investors include cloud computing giant Oracle, private equity firm Silver Lake, and Abu Dhabi-based investment company MGX, each holding 15%.
Government Approval and Background
A White House official confirmed that both the US and Chinese governments have approved the deal. This agreement follows years of negotiations and regulatory scrutiny, dating back to 2020 when former President Donald Trump attempted to ban TikTok over national security concerns.
The deal aligns with terms outlined last September when enforcement of a law threatening to ban the app was delayed pending ByteDance’s divestiture of US assets.
Operational Structure and Leadership
The joint venture will manage TikTok’s US content recommendation algorithm, user data, and backend operations, with the algorithm hosted securely on Oracle’s US cloud infrastructure. ByteDance will maintain control over revenue-generating operations such as advertising and e-commerce through a separate division.
Adam Presser and Will Farrell, former TikTok USDS executives, have been appointed CEO and chief security officer of the venture, respectively. TikTok CEO Shou Chew will also join the venture’s board, overseeing global business and strategy.
Investor Participation
Additional investors in the venture include the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital.
Context and Impact
The establishment of this joint venture marks a significant step in addressing US national security concerns while allowing TikTok to continue operating in the American market. The app remains influential, with former President Trump among its prominent users and the White House launching an official TikTok account in 2025.
