Tiktok has announced an American majority owned joint venture to establish operations in the United States and evade a ban over Chinese ownership.
ByteDance, Tiktok’s Chinese owner, said on Thursday that it has sealed a deal to initiate a majority American-owned joint venture to protect data of over 200 million American users of the platform.
The US first raised concerns regarding national security due to the app’s Chinese ties when President Donald Trump made attempts to ban the global digital entertainment platform in 2020.
Later, Trump made the decision not to enforce a law passed in April 2024, which demanded the Chinese owner sell Tiktok’s US assets by the upcoming January or undergo a ban. The Supreme Court upheld the procedure.
The Chinese owner further claimed Tiktok USDS Joint Venture LLC will employ data privacy and cybersecurity measures to protect American user data, including apps and algorithms.
In a social media post, the US President expressed approval for the deal, saying that the platform would now be owned by a group of great American patriots. He praised Chinese President Xi Jinping for the collaboration.
The agreement further states that American and international investors will own 80.1 percent, with ByteDance holding 19.9 percent of the venture.
The three managing directors of Tiktok USDS joint venture, Oracle, Silver Lake and Abu Dhabi-based investment firm MGX, will each hold 15 percent stakes.
Other investors in the venture include Dell Family Office, Alpha Wave Partners, Revolution, and Merritt Way, to name a few.
Tiktok joint venture strategy
The joint venture is expected to reassess and update the platform’s algorithm of content recommendation for US user data. Tiktok further confirmed that the algorithm would be secured in Oracle’s US cloud.
International bodies of the platform will be in charge of global product integration, e-commerce, and advertising. Third-party experts will audit cybersecurity. The data will also be required to adhere to federal standards.
According to sources, the joint venture will receive a sum of the revenue for the technology and data services it will employ.
