TikTok U.S. operations to be controlled by new joint venture with ByteDance
ByteDance, the Chinese owner of short-video platform TikTok, has signed binding agreements to create a joint venture that will take control of TikTok’s U.S. operations. The deal is aimed at avoiding a potential U.S. ban over national security concerns.
Under the agreement, 80.1% of the new company, TikTok USDS Joint Venture LLC, will be held by American and global investors, including Oracle, Silver Lake, and Abu Dhabi-based MGX. ByteDance will retain 19.9% ownership. The deal is expected to close on January 22.
The new venture will manage the U.S. version of TikTok and is described as an independent entity, responsible for U.S. user data protection, algorithm security, content moderation, and software assurance, according to TikTok CEO Shou Zi Chew.
Oracle will serve as the “trusted security partner,” overseeing compliance and safeguarding sensitive U.S. user data, which will be stored in a secure U.S.-based cloud infrastructure managed by Oracle.
Despite the agreement, questions remain in the U.S. about how much influence ByteDance will retain over TikTok’s core technology, including its recommendation algorithm. Some experts and lawmakers express concerns that the deal may not fully eliminate risks of Chinese influence.
TikTok has been under scrutiny in the U.S. since 2020, when authorities first raised national security concerns. The new ownership structure is intended to comply with the 2024 U.S. law requiring Chinese owners to divest or face a ban.
The platform is used by more than 170 million Americans, making it one of the country’s most popular digital services.
UCapital Asset Management LLP or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.
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