Trump-backed investors will now run TikTok's US operations
What's the story
The US and China have finalized a deal that transfers control of TikTok's American operations to a group of investors backed by President Donald Trump. The new company, called TikTok USDS Joint Venture LLC, will ensure the app remains accessible in the US while adhering to national security safeguards. These include data protections, algorithm security, content moderation, and software assurances for American users.
Ownership structure
ByteDance retains minority stake in new venture
ByteDance, the Beijing-based parent company of TikTok, will continue to hold a 19.9% stake in this new American operation. The joint venture will be run by a seven-member board of directors with Adam Presser as the CEO. TikTok's current CEO Shou Chew will also be on the board. Most of the members are Americans, according to a statement from TikTok.
Deal facilitation
Trump administration facilitates deal with American investors
The deal, facilitated by the Trump administration, involves Oracle, Silver Lake, and MGX as key investors in the US version of TikTok. In a post on Truth Social, Trump praised his administration for bringing this deal to a "very dramatic, final and beautiful conclusion." He also thanked Chinese President Xi Jinping for his cooperation in approving the deal.
Future security
TikTok's future secured amid national security concerns
The deal secures the future of TikTok in the US, which has been under scrutiny over its Chinese ownership. Both Trump and former President Joe Biden had raised national security concerns while pushing for a nationwide ban. The bipartisan Protecting Americans from Foreign Adversary Controlled Applications Act was supposed to take effect last year, requiring ByteDance to sell the platform or face a ban.
Data security
TikTok's recommendation algorithm and user data security
The new US company will retrain, test, and update the content recommendation algorithm on American user data. This algorithm will be secured in Oracle's US cloud environment. User data will also be stored in Oracle's cloud computing operation and reviewed by third-party cybersecurity experts for privacy and security purposes. Despite the separation from ByteDance, TikTok has assured that it will continue to provide a "global TikTok experience" for its American users.