After a tumultuous period marked by regulatory scrutiny and the threat of a ban, TikTok’s operations in the United States have officially transitioned to new ownership. The deal, which saw the popular short-form video app briefly disappear from app stores, culminates in the formation of TikTok USDS Joint Venture LLC, signaling a significant shift in its operational landscape and aiming to secure its future in the American market.
A New Ownership Structure Takes Shape
The newly established TikTok USDS Joint Venture LLC has received crucial approvals from both the US and China, solidifying a divestment plan first outlined in December. Under this new arrangement, ByteDance, TikTok’s original parent company, now holds a minority stake of just 19.9 percent. This move is designed to satisfy the terms of the “divest-or-ban” law enacted by President Biden in 2024, addressing national security concerns.
The majority 80.1 percent ownership is now distributed among a powerful consortium of investors. Leading the charge are three “managing investors,” each securing a 15 percent stake: the prominent investment firm Silver Lake, tech giant Oracle, and Abu Dhabi investment firm MGX. The remaining equity is held by several other notable investors, including Michael Dell’s family investment firm, Vastmere Strategic Investments (an affiliate of Susquehanna International Group), Alpha Wave Partners, Revolution, Merritt Way LLC, Via Nova (an affiliate of General Atlantic), Virgo LI, Inc., and NJJ Capital.
Safeguarding the User Experience: Key Commitments of the Joint Venture
While the financial specifics of these stakes remain undisclosed, the joint venture’s press release emphasized its core mandate: comprehensive oversight of data protections, algorithm security, content moderation, and software assurances for U.S. users. This commitment extends beyond TikTok itself to include other popular ByteDance applications like the video editor CapCut, Lemon8, and a broader portfolio of apps and services.
Interoperability and Global Reach
The joint venture aims to ensure U.S. users maintain a global TikTok experience, allowing creators and businesses to operate on an international scale. TikTok global’s U.S. entities will continue to manage product interoperability and certain commercial activities, including e-commerce, advertising, and marketing, fostering a seamless global connection.
Robust Data Protection
A cornerstone of the new venture is the stringent protection of U.S. user data. All data will be securely housed within Oracle’s U.S. cloud environment. The USDS Joint Venture will implement a rigorous data privacy and cybersecurity program, subject to third-party audits and certifications, adhering to major industry standards such as NIST CSF, 800-53, ISO 27001, and CISA Security Requirements for Restricted Transactions.
Secure Algorithm and Software Assurance
Addressing concerns about algorithmic influence, the content recommendation algorithm for U.S. users will be retrained, tested, and updated using U.S. user data, and critically, secured within Oracle’s U.S. cloud environment. Furthermore, U.S. apps will undergo continuous software assurance protocols, including ongoing source code review and validation, with Oracle serving as a Trusted Security Partner.
Empowered Trust & Safety
The Joint Venture will now hold independent decision-making authority over trust and safety policies and content moderation. This crucial aspect is designed to safeguard the U.S. content ecosystem, ensuring accountability and transparency through regular reporting and third-party certifications.
Leadership and the Road Ahead
The TikTok USDS Joint Venture will be governed by a seven-member board, which includes TikTok US CEO Shou Zi Chew. Adam Presser, formerly TikTok’s head of operations and trust and safety, has been appointed as the new CEO of the joint venture, signaling a focus on continuity and robust operational oversight.
This landmark deal aims to address long-standing national security concerns while allowing millions of American users to continue engaging with the platform. As TikTok embarks on this new chapter, all eyes will be on how the USDS Joint Venture navigates the complexities of global interoperability with stringent local data and content governance, setting a precedent for future international tech operations.
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