NEW YORK: TikTok on Thursday confirmed it has signed a joint venture agreement with investors, enabling the social media platform to maintain its operations in the United States and sidestep a potential ban over its Chinese ownership.
According to an internal memo obtained by AFP, CEO Shou Chew told employees that TikTok and its Chinese parent ByteDance have agreed to establish a new entity with major investors including Oracle, Silver Lake, and Abu Dhabi-based MGX.
Chew explained that the US joint venture will oversee data protection, algorithm security, content moderation, and software assurance for American users. It will also hold exclusive authority to certify that content, software, and data remain secure.
Under the agreement, Oracle, Silver Lake, and MGX will each hold 15 percent of the US venture, while affiliates of existing ByteDance investors will own just over 30 percent. ByteDance itself will retain slightly under 20 percent, the legal maximum for a Chinese company under US law.
TikTok Global’s US operations will manage global product interoperability, as well as certain commercial functions such as e-commerce, advertising, and marketing. Chew noted that additional steps remain ahead of the January 22 closing date for the deal.
The joint venture responds to legislation requiring ByteDance to sell TikTok’s US operations or face a ban, following concerns from US policymakers, including former President Donald Trump, that the app could be used to access Americans’ data or exert influence via its algorithm.
Trump had previously named Oracle’s founder Larry Ellison, a longtime ally, as a key figure in the arrangement. Ellison has recently returned to prominence through AI collaborations and media ventures, including his son’s takeover bids for Paramount and Warner Bros.
Experts view the agreement as a strategic compromise for ByteDance, allowing it to retain access to the lucrative US market and focus on new ventures, including artificial intelligence projects and potential IPO plans. Analysts, however, caution that the deal does not eliminate future regulatory risks in the US. (AFP)
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