TikTok's US business becomes new American-owned venture to avoid ban • FRANCE 24 English

Key Concepts

• Joint Venture: A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.
• Bite Dance: The Chinese company that originally owns TikTok.
• Oracle & Silver Lake: American companies taking majority stakes in the new TikTok US venture.
• Content Moderation: The process of monitoring and removing inappropriate or policy-violating content from a platform.
• Algorithm Retraining: Modifying the underlying code that determines what content users see, using new data.
• Data Localization: Storing user data within a specific geographic region (in this case, the US).

TikTok’s US Future: A New Ownership Structure

TikTok has announced a new ownership structure for its US operations to address national security concerns raised by the Trump administration. This announcement came immediately before the January 23rd deadline imposed by President Trump. The core of the solution is a joint venture designed to transfer majority control of TikTok’s US business to American investors.

Ownership Breakdown & Stake Distribution

Bite Dance, TikTok’s parent company based in China, will retain a minority stake of 19.9% in the new venture. This percentage is strategically below the 20% threshold that would grant Bite Dance controlling interest. The remaining 80.1% is distributed amongst a consortium of American investors. Specifically:

• Oracle: Holds a 15% stake.
• Silver Lake: Holds a 15% stake.
• MGX (Abu Dhabi-based firm): Holds a 15% stake.
• Other US Investors: Collectively hold the remaining 35.1%.

This structure effectively shifts control of TikTok’s US operations away from Chinese ownership.

Operational Control & Data Security

The newly formed joint venture will assume responsibility for a wide range of critical functions, including:

• Content Moderation: Ensuring content adheres to US standards and policies.
• Algorithm Management: The TikTok algorithm, responsible for curating the “For You” page, will be retrained using US-based user data. This retraining is a key component of addressing security concerns.
• Data Storage: All US user data will be stored within Oracle’s cloud infrastructure, ensuring data localization and potentially easing concerns about access by the Chinese government.
• Revenue & Technology Services: The venture will manage revenue generation and provide necessary technology services for the US TikTok platform.

Leadership & Transition

While TikTok’s current CEO, Shu Chu, will remain involved as a member of the seven-member board of the joint venture, Adam Presser, a current TikTok executive, will assume the role of CEO for the new US-controlled entity. This leadership transition signifies a shift towards American management of the platform’s US operations.

Political Context & Trump’s Response

President Trump publicly claimed credit for the deal, framing it as a victory for his administration. He specifically thanked Chinese President Xi Jinping for approving the arrangement, noting that Xi could have chosen to oppose it. As stated by President Trump, “I would also like to thank President Xi of China for working with us and ultimately approving the deal. He could have gone the other way but didn't and appreciated for his decision.” This statement highlights the political pressure that led to the negotiation of this joint venture.

Impact on US Users

For TikTok’s approximately 200 million US users, the immediate impact of this ownership change will be minimal. The app will continue to function as before, and users will not experience any immediate disruptions to their service. However, the long-term implications of the algorithm retraining and American control remain to be seen, potentially leading to shifts in the content users are shown.

Conclusion

The creation of this joint venture represents a significant compromise aimed at resolving the national security concerns surrounding TikTok’s US operations. By transferring majority ownership and control to American investors, and by localizing data storage and algorithm retraining, the deal allows TikTok to continue operating in the US while addressing the concerns raised by the Trump administration. The long-term effects on the platform’s content and user experience will depend on how the new American-led venture manages these critical operational aspects.