WASHINGTON: TikTok’s Chinese owner ByteDance said Thursday it has finalized a deal to create a majority-U.S.-owned joint venture that will secure U.S. data, to avoid a U.S. 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 battles that began in August 2020 when President Donald Trump attempted to ban the app over national security concerns.
Trump then chose not to enforce a law passed in April 2024 requiring ByteDance to sell its U.S. 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 users’ data, applications and algorithms through privacy and cybersecurity measures. He disclosed few details about the sale.
Trump praised the deal in a social media post, 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 done the opposite, but he didn’t, and he is appreciated for his decision.”
The deal calls for US and global investors to own 80.1% of the company while ByteDance will own 19.9%.
The three lead investors in TikTok USDS JV – 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 American and Chinese governments had signed the agreement. The Chinese embassy in Washington had no immediate comment.
Trump said last year that the deal met conditions for divestment under the 2024 law. The White House said in September that the company would operate TikTok’s U.S. app. Interested parties have not yet disclosed elements of the deal such as the business relationship between the company and ByteDance.
The president has more than 16 million followers on his personal TikTok account and has credited the app with helping him win re-election. He received a document from TikTok on December 22 touting his popularity on the app, as shown in a photo published this month by The New York Times. The White House also launched an official TikTok account in August.
TikTok said investors in the company include Dell Family Office – Dell Technologies founder Michael Dell’s investment company – as well as Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Former TikTok USDS executives Adam Presser and Will Farrell have been named CEO and chief security officer, respectively.
TikTok CEO Shou Chew was also named to the company’s board of directors; 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 U.S. business operations but cede control of the app’s data, content and algorithm to the company.
The company will serve as back-end operations for the U.S. company and manage U.S. user data and the algorithm, sources said at the time. They said a separate division, wholly owned by ByteDance, would control revenue-generating business operations such as e-commerce and advertising.
The new company will receive a portion of revenue from its technology and data services, the sources added.
