TikTok’s Chinese owner, ByteDance, has signed binding agreements with three American investors – Oracle, Silver Lake and MGX – to form a joint venture to operate TikTok’s US app.
Why it matters:
ByteDance has for years been under pressure from the US government to divest its US business due to national security concerns.
After a lengthy period of uncertainty, this JV shores up the future of the video-sharing app in the US.
How it will work:
The US joint venture will be 50% held by a consortium of new investors, of which Oracle, Silver Lake and MGX will own 15% each.
30.1% will be held by affiliates of existing ByteDance investors.
The remaining 19.9% will be retained by ByteDance.
The US venture will have a new, seven-member American-majority board of directors.
US user data will be stored locally in an Oracle-run system.
There will also be provisions to “protect Americans’ data and US national security,” as per a staff memo from TikTok CEO Shou Zi Chew.
TikTok’s algorithm will be retrained on US data to ensure it isn’t susceptible to outside manipulation.
The US venture will also oversee content moderation and policies within the US.
The deal is expected to close on January 22.
What they said:
Shou Zi Chew, in a staff memo: “We have signed agreements with investors regarding a new TikTok US joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community.”
