China-based ByteDance, the parent company of TikTok, announced on Thursday that it has completed an agreement to establish a joint venture with majority American ownership. The new entity will manage the data of TikTok’s 200 million users in the United States, in a move aimed at preventing a ban of the platform in the country.
The deal marks a major milestone for TikTok following a prolonged dispute that began in August 2020, when US President Donald Trump attempted to ban the app on national security grounds, according to Reuters.
Background to the agreement
Trump later chose not to enforce legislation passed in April 2024 that required ByteDance to divest its US assets by January 2025 or face a ban — a decision that had been upheld by the US Supreme Court.
ByteDance said the newly formed TikTok USDS Joint Venture LLC will safeguard US users’ data, applications and algorithms through enhanced data protection and cybersecurity measures.
Ownership structure and key investors
Under the agreement, American investors will hold 80.1% of TikTok’s US operations, while ByteDance will retain a 19.9% stake.
The three largest investors in TikTok USDS JV are:
- Oracle,
- Silver Lake, and
- MGX,
each holding a 15% stake.
TikTok said additional investors include Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital.
Trump welcomes the deal
Trump praised the agreement, saying TikTok “will now be owned by a group of major American patriots and investors — among the largest in the world”.
He also thanked Chinese President Xi Jinping for his cooperation and for approving the deal. “He could have chosen the opposite path, but he didn’t, and we appreciate that decision,” Trump said.
The US President, who has more than 16 million followers on his personal TikTok account, credited the platform with contributing to his re-election. The White House also launched an official TikTok account in August.
Data security and algorithm control
According to TikTok, the joint venture will retrain, test and update the platform’s content recommendation algorithm using US user data. The algorithm will be secured on Oracle’s US-based cloud infrastructure, ensuring that sensitive data and core systems remain under American control.
A White House official told Reuters that both the US and Chinese governments have signed off on the agreement. The Chinese embassy in Washington declined to comment.
Source: Reuters