WASHINGTON: TikTok’s Chinese owner ByteDance said Thursday it has closed a deal to establish a majority-U.S.-owned joint venture that will protect 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 subsequently chose not to enforce a law passed in April 2024 that required ByteDance to sell its US assets by the following January or face a ban, a move upheld by the Supreme Court.
ByteDance said TikTok USDS Joint Venture LLC will protect US users’ data, applications and algorithms through data privacy and cybersecurity measures. He revealed few details about the divestment.
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 taken the other path, but he didn’t, and he is thanked for his decision.”
The deal sees US and global investors own 80.1% of the company, while ByteDance will own 19.9%.
The three managing investors of TikTok USDS JV – cloud computing giant Oracle, private equity group Silver Lake (SILAK.UL) and Abu Dhabi-based investment firm MGX – will each hold 15%.
A White House official said Reuters that the governments of the United States and China had signed the agreement. The Chinese embassy in Washington had no immediate comment.
Trump said last year that the deal met the terms of the divestment requirements under the 2024 law. In September, the White House said the company would operate the US app TikTok. Interested parties have yet to disclose 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 credits the app for helping him win re-election. He received a document from TikTok on Dec. 22 touting how popular he is on the app, a photo published this month by the New York Times shows. The White House also launched an official TikTok account in August.
TikTok said investors in the company include Dell Family Office, the investment firm of Dell Technologies founder Michael Dell, as well as 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 CSO, respectively.
TikTok CEO Shou Chew was also named to the company’s board of directors; leads TikTok’s global business and strategy.
The company will retrain, test and update TikTok’s content recommendation algorithm with data from US users, 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 company.
The company will serve as backend operations for the US company and handle US user data and the algorithm, the sources said at the time. They said a separate wholly owned division of ByteDance would control revenue-generating business operations such as e-commerce and advertising.
The new company will receive a portion of the revenue for its technology and data services, the sources added.
