ByteDance, the Chinese owner of TikTok, announced that it has finalised a deal to establish a majority American-owned joint venture to secure U.S. data, and to avoid a ban on the TikTok app in the U.S.
This is a milestone deal for the social media company after a prolonged battle, starting from 2020, when President Donald Trump first attempted to ban the app. Later, he opted against enforcing a law passed in 2024 that would require ByteDance to sell all U.S. assets by January or risk a ban.
Trump made a social media post praising the deal, happy that “it will now be owned by a group of Great American Patriots and Investors, the Biggest in the World.”
He thanked Chinese President Xi Jinping “for working with us and, ultimately, approving the Deal. He could have gone the other way, but didn’t, and is appreciated for his decision.”
Minority Ownership
As per the agreement, American and global investors will own 80.1% of this venture, leaving 19.9% of ownership for ByteDance. Trump said last year that the deal met the terms of divestiture requirements under the 2024 law.
While the venture will serve as backend operations to the U.S. company and handle U.S. user data, ByteDance will control the revenue-generating business operations, according to sources. The venture will only receive a portion of the revenue for technology and data services.
In September, the White House announced that this venture would operate the U.S. TikTok app. However, interested parties have not disclosed further details such as the business relationship between ByteDance and the venture.
This venture will retrain and update TikTok’s content recommendation algorithm on user data from the U.S. that will be secured in Oracle’s U.S. cloud.
Elements Of The Deal
TikTok listed the Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merrit Way, Via Nova, Virgo LI and NJJ Capital as investors in the venture.
Former TikTok USDS executives, Adam Presser and Will Farrell, have been appointed CEO and Chief Security Officer, respectively. TikTok CEO Shou Chew was also listed on the venture’s board, leading TikTok’s global business and strategy.
Last year, Trump said the deal met the terms of divestiture requirements under the 2024 law. The White House in September said the venture would operate TikTok’s U.S. app. Interested parties have yet to disclose elements of the deal, such as the business relationships between the venture and ByteDance.
The president has more than 16 million followers on his personal TikTok account and credited the app with helping him win reelection. He received a document from TikTok on December 22 touting how popular he is on the app, showing a photo published this month by the New York Times. The White House also launched an official TikTok account in August.
(with inputs from Reuters)
