WASHINGTON – TikTok’s Chinese owner, ByteDance, has signed binding agreements with three major investors to form a joint venture to operate TikTok’s U.S. app, led by American and global investors, in a bid to avoid a U.S. government ban. The deal is a milestone for the short video app used regularly by more than 170 million Americans after years of battles.
“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community,” TikTok CEO Shou Zi Chew told employees in a memo.
Under the deal, American and global investors will hold an 80.1% stake while ByteDance will retain a 19.9% stake in the new joint venture after its divestiture. Oracle, Silver Lake, and MGX will collectively own 45% of the new entity.
The joint venture, named TikTok USDS Joint Venture LLC, will operate as an independent entity with authority over U.S. data protection, algorithm security, content moderation, and software assurance. Oracle will serve as the “trusted security partner” responsible for auditing and validating compliance, including safeguarding sensitive U.S. user data, which will be stored in a trusted and secure cloud environment in the United States run by Oracle.
The deal addresses national security concerns and ensures U.S. data protection. The White House said in September the new joint venture will operate TikTok’s U.S. app, but questions remain about the deal.
