ALBAWABA — TikTok's Chinese parent company, ByteDance, has struck a deal to establish a new U.S.-based joint venture. This new entity will have American partners holding a controlling stake, a move that effectively resolves years of political and legal turmoil surrounding the app's future in the U.S., and narrowly sidesteps a potential nationwide ban.
The new TikTok entity will cater to over 200 million users and 7.5 million businesses in the U.S. It will operate under what the company calls stringent data security and content moderation protocols.
American and international investors will collectively hold the majority of shares in this new venture. ByteDance, however, will maintain a 19.9% stake, ensuring its ownership remains below the 20% legal limit established by U.S. regulations.
U.S. President Donald Trump hailed the agreement, attributing its success to his administration's efforts. He also expressed gratitude to Chinese President Xi Jinping for his approval. On his Truth Social platform, Trump declared the deal a victory, asserting it had "saved TikTok." He went on to say the platform would now be owned by "great American investors," ensuring its continued prominence as a digital platform.
Key Investors and Governance
The agreement designates three principal investors: Silver Lake, Oracle, and the Abu Dhabi-based artificial intelligence investment fund MGX. Each will hold a 15% stake in the newly formed company.
The U.S.-based entity will take charge of trust and safety policies, along with content moderation for American users.
TikTok's worldwide operations will keep handling international product integration and commercial functions, encompassing advertising and e-commerce.
Under the agreement, data from American users will be kept on Oracle-managed cloud infrastructure. Independent, third-party experts will supervise cybersecurity audits and ensure compliance with federal regulations.
Board and Oversight
The new company will be run by a seven-member board, with a majority of its members being American.
The board will feature TikTok's Shou Zi Chew, along with top executives from the investment firms involved.
A Resolution to a Protracted Conflict
This agreement signifies a significant shift in TikTok's American business, effectively ending a disagreement that began in August 2020. At that time, the U.S. government voiced worries about the app's data handling and possible connections to China.
A White House official informed Reuters that both the U.S. and Chinese governments have officially greenlit the deal. This approval allows TikTok to keep running in the United States, now under its new ownership and management.
