ByteDance Strikes Deal with U.S. Investors to Form New TikTok Joint Venture
TikTok’s Chinese parent company, ByteDance, announced on Thursday that it had signed binding agreements with three major investors to create a new joint venture to operate the app’s U.S. business. The agreement aims to prevent a government ban and marks a decisive step toward resolving years of political and regulatory uncertainty surrounding the platform.
The deal represents a breakthrough for the short-video app, which serves more than 170 million American users, following a series of disputes dating back to August 2020, when then-President Donald Trump first sought unsuccessfully to prohibit TikTok in the United States.
Major Restructuring of TikTok’s U.S. Operations
Under the terms of the new agreement, American and global investors will hold an 80.1% stake in the U.S. joint venture, while ByteDance will retain 19.9% following the divestiture. The new company, named TikTok USDS Joint Venture LLC, will include Oracle, Silver Lake, and Abu Dhabi-based MGX as managing investors. Together, these firms will control 45% of the entity, with additional shares held by existing ByteDance investors.
TikTok Chief Executive Shou Zi Chew told employees in a memo that the new venture will function as an independent company with oversight over U.S. data protection, algorithm security, content moderation, and software assurance. “Over 170 million Americans will continue discovering a world of endless possibilities as part of a vital global community,” Chew said.
Oracle will act as the trusted security partner, responsible for safeguarding U.S. user data within a secure cloud system hosted in the United States. The arrangement also requires that a majority of the new venture’s seven-member board be composed of American directors.
Government Involvement and Investor Influence
The agreement follows months of negotiations after the 2024 law requiring ByteDance to divest TikTok’s U.S. operations or face a ban. Trump delayed the enforcement of the ban until January 20 and later confirmed the arrangement met the legal divestiture requirements.
Trump also credited TikTok for helping boost his 2024 re-election campaign, having amassed over 15 million followers on his personal account. The White House, which launched its own TikTok account in August, referred questions about the agreement to TikTok.
According to Trump, the investor group may also include Michael Dell, Rupert Murdoch, and several other high-profile figures. Analysts expect the deal to pass regulatory review smoothly, given the close involvement of federal authorities in shaping the agreement.
Political Reactions and Future Oversight
Despite the positive outlook, political criticism has surfaced. Democratic Senator Elizabeth Warren questioned the influence of wealthy investors, calling the arrangement a “billionaire takeover” that potentially hands greater control of U.S. media consumption to Trump’s associates.
The agreement gives ByteDance the right to appoint one board member while limiting its decision-making power in the new structure. Meanwhile, TikTok Global will continue overseeing certain global functions, such as e-commerce, advertising, and marketing, to maintain interoperability between platforms.
Analyst Craig A. Huber of Huber Research Partners said he saw few regulatory hurdles ahead. “At this stage, I see no issues, particularly given the federal government and President Trump were deeply involved in putting the deal together,” he said.
with inputs from Reuters
