TikTok Finalizes U.S. Joint Venture Deal to Avert Nationwide Ban
GeokHub
WASHINGTON | Jan 22 (GeokHub) TikTok’s Chinese parent company, ByteDance, has finalized an agreement to establish a new U.S.-based joint venture with majority American ownership, a move designed to safeguard U.S. user data and avert a potential nationwide ban of the popular short-video platform.
The deal, announced Thursday, ends years of political and legal uncertainty surrounding TikTok, which is used by more than 200 million Americans. U.S. officials had long raised national security concerns over the handling of user data and the app’s ties to China.
Ownership Structure and Control
Under the agreement, American and global investors will own 80.1% of the newly formed entity, named TikTok USDS Joint Venture LLC, while ByteDance will retain a 19.9% minority stake.
The venture’s three managing investors — Oracle, Silver Lake, and Abu Dhabi-based MGX — will each hold 15% ownership stakes. Other investors include the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI, and NJJ Capital.
Both the U.S. and Chinese governments have approved the arrangement, according to a senior U.S. official familiar with the matter.
Data Security and Algorithm Safeguards
TikTok said the joint venture will take responsibility for securing U.S. user data, the app’s core systems, and its recommendation algorithms, using enhanced privacy protections and cybersecurity measures.
As part of the agreement:
- TikTok’s recommendation algorithm for U.S. users will be retrained and tested exclusively on U.S. data
- The algorithm and user data will be hosted on Oracle’s U.S.-based cloud infrastructure
- The venture will manage backend operations related to data handling and security
ByteDance will continue to oversee global strategy and certain revenue-generating activities such as advertising and e-commerce through a separate, wholly owned unit, according to people familiar with the structure.
Leadership and Governance
Former TikTok executives Adam Presser and Will Farrell have been appointed Chief Executive Officer and Chief Security Officer of the new venture, respectively. TikTok’s global CEO Shou Chew will also serve on the venture’s board.
Political Backdrop
The deal marks a turning point in a dispute that began in 2020, when then-President Donald Trump first attempted to ban TikTok over security concerns. A later law passed in 2024 required ByteDance to divest its U.S. assets or face a ban, a measure later upheld by the Supreme Court.
Trump praised the agreement publicly, describing it as a win for American investors and national security. He has previously credited TikTok with helping him connect with voters and boost his reelection campaign.
