ByteDance, the Chinese parent company of TikTok, announced it has reached an agreement to establish a new joint venture named "TikTok USDS Joint Venture LLC" to officially separate the management of the app in the U.S. from its global operations. The main goal is to protect user data and address national security concerns, allowing TikTok to avoid the prolonged ban threat in the U.S.
Under this agreement, ByteDance will reduce its ownership stake in the joint venture to just 19.9%, while 80.1% will be held by U.S. investors and global investors. The three main investors are Oracle, a cloud computing giant (15% ownership); Silver Lake, a major asset management group (15% ownership); and MGX, an investment company from Abu Dhabi (15% ownership). Other leading investors include Michael Dell's Dell Family Office, as well as groups like Alpha Wave Partners and NJJ Capital.
This new company will manage data of over 200 million American users, as well as the entire app and algorithm. It will use Oracle's cloud infrastructure in the U.S. to test and update content recommendation systems. ByteDance will retain ownership of revenue-generating business operations such as e-commerce and advertising but will have no control over the U.S. data and algorithm.
For management, Adam Presser has been appointed CEO, and Will Farrell will serve as Chief Security Officer (CSO). Zhou Souzhu, CEO of TikTok Global, will also be part of the company's board.
Donald Trump, who attempted to ban the app in 2020, called the deal a significant victory. He posted on social media, "I am very happy to have helped save TikTok! Now it will be owned by patriotic American groups and investors." Trump also added that TikTok played an important role in helping him win the 2024 election by reaching younger voters.
Trump also thanked Vice President JD Vance and his team for their negotiation efforts, and praised Chinese President Xi Jinping for approving the deal, describing the decision as "commendable."
This agreement ends legal uncertainty ahead of the January 23 deadline, when the Divestiture Law comes into effect, requiring the sale of the business if the separation terms are not successfully agreed upon.