The deal to secure TikTok’s future in the US has finally closed

The joint venture acquiring TikTok’s US assets has been formally established and has announced its leadership team, according to the company, one day before the deadline set by President Donald Trump for the app’s US assets to be spun off by Chinese parent company ByteDance.

The transaction’s close concludes a yearslong effort to secure TikTok’s long-term future in the United States and address concerns that it posed a national security risk.

“The majority American owned Joint Venture will operate under defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users,” the group said in a statement on Thursday.

The joint venture will be led by CEO Adam Presser, who previously led TikTok’s efforts to secure Americans’ user data in the United States, and Chief Security Officer Will Farrell, who led privacy and security for the effort.

It will be overseen by a board that includes TikTok US CEO Shou Chew; Kenneth Glueck, Executive Vice President in the Office of the Chief Executive Officer at Oracle; and representatives of investment firm Susquehanna International Group and private equity firm Silver Lake, Emirati investment firm MGX, among others.

The US TikTok saga began when Trump, during his first term, vowed to ban the app. It ramped up in 2024 when then-President Joe Biden signed a law requiring that the US version of the app be spun off from its parent company, ByteDance, or be banned in the United States. 

During his second term, Trump has repeatedly delayed enforcement of the law as he sought a deal to transfer control of the app’s US operations to American ownership.

When he approved the deal last fall, Trump gave the parties a January 23 deadline to finalize the transaction. TikTok signed the deal last month.

The deal will likely be good news to TikTok’s more than 200 million American users, many of whom rely on the app for entertainment, news and, in some cases, even their livelihoods.

The agreement transferred control of TikTok’s US user data and most of its US operations to a new joint venture, 50% of which will be owned by a consortium of investors comprised of tech company Oracle, private equity firm Silver Lake and Emirati-backed investment firm MGX. 

Just over 30% of the joint venture will be held by “affiliates of certain existing investors in ByteDance,” and 19.9% will be retained by ByteDance, according to a memo Chew sent to employees last month.

The new entity plans to retrain TikTok’s algorithm on US user data, and Oracle will oversee storage of Americans’ data. The US joint venture will also be responsible for content moderation for US users. 

However, the ByteDance-controlled global TikTok entity will continue to manage e-commerce, advertising and marketing on the new US platform, according to Chew’s memo.

That means American users’ experience on the app is unlikely to change in a visible way, although the algorithm that determines what videos are served to their feeds could shift as the new ownership group takes control.

Trump last year designated the spinoff deal as a “qualified divestiture” under the sale-or-ban law. But questions remain about whether the arrangement fully addresses the core national security concerns that motivated US lawmakers to pass the law on a bipartisan basis in the first place.

US officials had worried that ByteDance could be forced to manipulate the algorithm on behalf of the Chinese government to influence or generate dissent among Americans. 

The TikTok ban-or-sale law prohibited “any cooperation with respect to the operation of a content recommendation algorithm” between ByteDance and a new potential American ownership group.

“Interoperability enables the Joint Venture to provide U.S. users with a global TikTok experience, ensuring U.S. creators can be discovered and businesses can operate on a global scale,” the joint venture group said in its statement.

Under the deal finalized Thursday, the new joint venture will continue to license the TikTok algorithm from ByteDance before retraining and reviewing it.

Whether Beijing would approve the deal had also remained uncertain up until the deal’s close. TikTok had become a leverage point in broader US-China trade negotiations; an earlier version of the deal was derailed last year after Trump announced a new round of tariffs.

The Chinese government still has not directly addressed the final deal structure.

Source: CNN

--Agencies