WASHINGTON: TikTok’s Chinese owner, ByteDance, finalised a deal on Thursday (Jan 22) to set up a majority American-owned joint venture company to avoid a US ban on the popular social media app used by millions of Americans.
The deal is a milestone for the short video app after years of battles that began in August 2020, when President Donald Trump first tried unsuccessfully to ban the app over national security concerns.
The TikTok USDS Joint Venture LLC will serve more than 200 million users and 7.5 million businesses while implementing strict safeguards for data protection, algorithm security and content moderation, the company said.
ByteDance retains a 19.9 per cent stake in the joint venture – keeping its ownership below the 20 per cent threshold stipulated by the law.
Three investors – Silver Lake, Oracle and Abu Dhabi-based AI investment fund MGX – each hold 15 per cent stakes. Oracle’s executive chairman Larry Ellison is a longtime Trump ally.
Other investors include Dell Family Office, affiliates of Susquehanna International Group and General Atlantic, and several other investment firms.
The joint venture will retain decision-making authority over trust and safety policies and content moderation for US users, while TikTok’s global entities will manage international product integration and commercial activities including e-commerce and advertising.
The joint venture will be governed by a seven-member, majority-American board including TikTok CEO Chew Shou Zi and executives from major investment firms.
TikTok executive Adam Presser was appointed CEO of the new entity, with Will Farrell serving as chief security officer.
