san francisco — TikTok has signed agreements with three major investors – Oracle, Silver Lake and MGX – to form a new joint venture for TikTok in the US, ensuring the popular social video platform will continue to operate in the US.
The deal is expected to close on Jan. 22, according to an internal memo seen by The Associated Press. In the call, CEO Shou Zi Chew assured employees that ByteDance and Tik Tok Signed binding agreements with the consortium.
Half of TikTok’s new US joint venture will be owned by a group of investors – including Oracle, Silver Lake and Emirati investment firm MGX, who will each hold a 15% stake. ByteDance itself will own 19.9% of the new app, while affiliates of existing ByteDance investors will own another 30.1%, according to the memo.
The memorandum said that the American project will have a new board of directors that includes seven members with an American majority. It will also be subject to conditions that “protect Americans’ data and American national security.”
US user data will be stored locally in a system managed by Oracle.
TikTok’s algorithm — the secret sauce that powers addictive video streaming — will be retrained on US user data “to ensure the content feed is free of external manipulation,” the memo said. The American project will also oversee content and policy moderation within the country.
US officials have previously warned that ByteDance’s algorithm is vulnerable to manipulation by Chinese authorities, who could use it to shape content on the platform in a way that is difficult to detect.
The algorithm has been a central issue in the security debate around TikTok. China has previously maintained that the algorithm must remain under Chinese control by law. But the US regulation, which was passed with bipartisan support, said that any divestment in TikTok must mean that the platform cuts its ties – especially the algorithm – with ByteDance.
The deal marks the end of years of uncertainty about the fate of the popular video sharing platform in the United States. After a broad bipartisan majority in Congress passed — and President Joe Biden signed — a law that would do just that TikTok banned in the US If it doesn’t find a new owner instead of China’s ByteDance, the platform is set to disappear at the law’s January 2025 deadline. For several hours, it did. But on his first day in office, President Donald Trump signed a document Executive order to continue its operation While his management is trying to reach an agreement to sell the company.
Three more executive orders followed as Trump, without a clear legal basis, continued to extend the deadline for the TikTok deal. the The second was in Aprilwhen White House officials thought they were close to reaching an agreement to spin off TikTok into a new US-owned company, but it collapsed after China withdrew following Trump’s tariff announcement. The third came In JuneThen another in September, which Trump said would allow TikTok to continue operating in the United States in a way that meets national security concerns.
TikTok has more than 170 million users in the United States