TikTok has reached a deal to form a joint venture that will allow it to continue operating in the US, ending five years of uncertainty since Donald Trump first threatened to ban the platform over national security concerns. The agreement, signed by Chinese owner ByteDance with Oracle, private-equity group Silver Lake and Abu Dhabi’s MGX, will enable ByteDance to retain control of its core US operations.
Under the arrangement, the joint venture will oversee data protection, algorithm security and content moderation. However, ByteDance will continue to run US operations including e-commerce, advertising and marketing, according to a memo from TikTok chief executive Shou Zi Chew. The deal comes after Congress passed legislation prohibiting ByteDance from retaining operational ties with TikTok US, but gave the US president power to approve any deal meeting national security requirements.
Oracle, Silver Lake and MGX will each control 15% of the joint venture, while existing ByteDance investors will take 30.1% and ByteDance itself will own 19.9%—the maximum permitted under US foreign ownership laws. The remaining 5% will go to unnamed new investors. A seven-member board, majority American, will oversee the venture.
Oracle will oversee the algorithm that recommends videos to US users, with the system retrained using US data to prevent outside manipulation. China will retain control of the algorithm under a licensing agreement approved by its cybersecurity regulator. The deal is expected to close on 22 January, a day before Trump’s deadline for a ban.
The involvement of Oracle’s Larry Ellison has raised concerns about media consolidation among pro-Trump billionaires. Democratic Senator Elizabeth Warren criticised the deal, saying: 'Trump wants to hand over even more control of what you watch to his billionaire buddies.'
