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TikTok Finalizes U.S. Joint Venture to Protect Data, Avoid Ban

TikTok’s Chinese parent company, ByteDance, has finalized a deal to establish a majority American-owned joint venture to manage U.S. user data, content, and algorithms, in a move designed to prevent a potential U.S. ban on the short-video platform. The app, which is used by over 200 million Americans, has faced regulatory scrutiny since 2020 over national security concerns.

The new entity, TikTok USDS Joint Venture LLC, will give American and global investors 80.1% stake, while ByteDance retains a 19.9% share. Key investors in the venture include Oracle, private equity firm Silver Lake, and Abu Dhabi-based MGX, each holding 15%. Other investors include the Dell Family Office, Alpha Wave Partners, and several strategic investment firms. Former TikTok USDS executives Adam Presser and Will Farrell will serve as CEO and chief security officer of the venture, while TikTok CEO Shou Chew will join its board.

Data Privacy and Algorithm Security at the Core

The venture is tasked with securing U.S. user data and the content recommendation algorithm through robust data privacy and cybersecurity measures. TikTok said the algorithm will be retrained and tested on U.S. data and hosted on Oracle’s U.S.-based cloud infrastructure. ByteDance will continue to operate revenue-generating aspects of the business, such as advertising and e-commerce, while the venture handles backend operations, technology, and data services.

The agreement follows a long-standing requirement from the 2024 law, upheld by the Supreme Court, which initially mandated that ByteDance divest its U.S. assets or face a ban. Former President Donald Trump praised the deal, calling the venture “owned by a group of Great American Patriots and Investors,” and thanked Chinese President Xi Jinping for approving the arrangement. A White House official confirmed that both U.S. and Chinese governments had signed off on the deal.

Strategic Move amid Regulatory Pressure

The creation of the U.S. joint venture marks a key milestone for TikTok, allowing it to continue operations without government-imposed restrictions while addressing national security concerns. The venture will receive a portion of revenue in exchange for technology and data management services, reflecting a unique structure that separates control over user data from revenue operations.

The move comes as the platform remains central to U.S. social media engagement, with political figures including former President Trump and the White House maintaining active accounts. Industry analysts view the venture as a model for balancing regulatory compliance with operational continuity in foreign-owned tech companies.