WASHINGTON: TikTok’s Chinese owner ByteDance said on Thursday it has finalized a deal to set up a US-owned joint venture that will secure US data to avoid a US ban on the short video app used by more than 200 million Americans.
The deal is a milestone for the social media company after years of struggles that began in August 2020, when President Donald Trump tried to ban the app over national security concerns.
Trump later chose not to enforce a law passed in April 2024 requiring ByteDance to sell its US assets by the following January or face a ban – a measure upheld by the Supreme Court.
ByteDance said TikTok USDS Joint Venture LLC will secure US user data, apps and algorithms through data protection and cyber security measures. It revealed few details about the divestment.
Trump praised the deal in a post on social media, saying TikTok “will now be owned by a group of great American patriots and investors, the largest in the world.”
He thanked Chinese President Xi Jinping “for working with us and ultimately approving the deal. He could have gone the other way, but he didn’t, and he is appreciated for his decision.”
The deal allows US and global investors to own 80.1% of the venture, while ByteDance will own 19.9%.
The TikTok USDS JV’s three lead investors — cloud computing giant Oracle, private equity group Silver Lake ( SILAK.UL ) and Abu Dhabi-based investment firm MGX — will each own 15%.
A White House official said Reuters that the US and Chinese governments had signed the agreement. The Chinese Embassy in Washington did not immediately comment.
Trump said last year that the deal met the terms of divestment requirements under the 2024 Act. The White House said in September that the company would operate TikTok’s US app. Interested parties have not yet disclosed elements of the deal, such as the business relationships between the company and ByteDance.
The president has more than 16 million followers on his personal TikTok account and credited the app with helping him win re-election. He received a document from TikTok on Dec. 22 highlighting how popular he is on the app, a photo published this month by the New York Times showed. The White House also launched an official TikTok account in August.
TikTok said investors in the venture include Dell Family Office — the investment firm of Dell Technologies founder Michael Dell — plus Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Former TikTok USDS figures Adam Presser and Will Farrell have been named CEO and Chief Security Officer, respectively.
TikTok CEO Shou Chew was also appointed to the venture’s board; he leads TikTok’s global business and strategy.
The company will retrain, test and update TikTok’s content recommendation algorithm on US user data, and the algorithm will be secured in Oracle’s US cloud, TikTok said.
In September Reuters reported, citing sources, that ByteDance would retain ownership of TikTok’s US business operations, but would cede control of the app’s data, content and algorithm to the venture.
The company will act as backend operations for the US company and handle US user data and the algorithm, sources said at the time. They said a separate division, 100% owned by ByteDance, would control revenue-generating business activities such as e-commerce and advertising.
The new venture will receive a share of revenue for its technology and data services, the sources added.
