ByteDance is relinquishing control of TikTok's US operations to US and international investors
Chinese company ByteDance, the owner of TikTok, has signed agreements to form a joint venture that will transfer control of TikTok's US operations to US and international investors.
TikTok/PHOTO: Shutterstock
According to Reuters, the agreement marks a landmark moment for the short video app, used regularly by more than 170 million Americans, after years of disputes that began in August 2020, when President Donald Trump first unsuccessfully tried to ban the app, citing national security concerns.
The details of the deal are those presented in September, when Trump had delayed until January 20 the implementation of the law banning the app if the Chinese owners do not sell their stake.
The new US company would be valued at about $14 billion, Vice Chairman JD Vance said in September.
According to the deal, US and international investors, including cloud computing giant Oracle, investment fund Silver Lake and Abu Dhabi's MGX Group, will own 80.1% of the new entity TikTok USDS Joint Venture LLC, while ByteDance will retain 19.9%.
TikTok CEO Shou Zi Chew told employees that the joint venture would operate as an independent entity with authority over US user data protection, algorithm security, content moderation and software assurance, according to a memorandum seen by Reuters.
Although the new joint venture will operate TikTok in the US, the company's global entities will continue to handle certain business activities. Uncertainty remains over control of the algorithm, with Chinese media claiming that ByteDance will retain an important role and benefit from a share of the new entity's revenue.
The deal, due to be finalized on January 22, would end years of efforts to force ByteDance to divest its US business on national security grounds.
The document includes ByteDance appointing one of the seven board members of the new entity, with Americans holding most of the other seats.
Oracle will act as “trusted security partner“, responsible for auditing and verifying compliance, including protecting sensitive data of US users, which will be stored in a secure cloud environment in the United States managed by Oracle, TikTok's message to employees said.
Trump credited TikTok for helping him win re-election last year and has more than 15 million followers on his personal TikTok account. The White House also launched an official TikTok account in August.
Democratic Sen. Elizabeth Warren said there were many unanswered questions about the deal.
“Trump wants to give his billionaire friends even more control over what you watch. Americans deserve to know if the president made another covert deal for this billionaire takeover of TikTok.”she wrote on the X platform.
Trump has a close relationship with billionaire Larry Ellison, CEO of Oracle, and his family. Paramount Skydance is trying to take over Warner Bros Discovery in a hostile takeover bid with financial backing from the Ellison family.
