TikTok finalizes deal to form new American entity
The social video platform company signed agreements with major investors including Oracle, Silver Lake and MGX to form the new TikTok U.S. joint venture.
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TikTok has finalized a deal to create a new American version of the app, avoiding the looming threat of a ban in the U.S. that has been in discussion for years.
The social video platform company signed agreements with major investors including Oracle, Silver Lake and MGX to form the new TikTok U.S. joint venture. The new app will operate under “defined safeguards that protect national security through comprehensive data protections, algorithm security, content moderation and software assurances for U.S. users,” the company said in a statement Thursday.
Adam Presser, who previously worked as TikTok’s head of operations and trust and safety, will lead the new venture as its CEO. He will work alongside a seven-member, majority-American board of directors that includes TikTok’s CEO Shou Chew.
The deal marks the end of years of uncertainty about the fate of the popular video-sharing platform in the United States. After wide bipartisan majorities in Congress passed — and President Joe Biden signed — a law that would ban TikTok in the U.S. if it did not find a new owner in the place of China’s ByteDance, the platform was set to go dark on the law’s January 2025 deadline. For a several hours, it did. But on his first day in office, President Donald Trump signed an executive order to keep it running while his administration sought an agreement for the sale of the company.
In addition to an emphasis on data protection, with U.S. user data being stored locally in a system run by Oracle, the joint venture will also focus on TikTok’s algorithm. The content recommendation formula, which feeds users specific videos tailored to their preferences and interests, will be retrained, tested and updated on U.S. user data, the company said in its announcement.
Oracle, Silver Lake and the Emirati investment firm MGX are the three managing investors, who each hold a 15% share. Other investors include the investment firm of Michael Dell, the billionaire founder of Dell Technologies. ByteDance retains 19.9% of the joint venture.
