ByteDance retains a 19.9 per cent stake in the joint venture – keeping its ownership below the 20 per cent threshold stipulated by the law.
TikTok’s Chinese owner, ByteDance, finalised a deal on Thursday (Jan 22) to set up a majority American-owned joint venture company to avoid a US ban on the popular social media app used by millions of Americans.
The deal is a milestone for the short video app after years of battles that began in August 2020, when President Donald Trump first tried unsuccessfully to ban the app over national security concerns.
The TikTok USDS Joint Venture LLC will serve more than 200 million users and 7.5 million businesses while implementing strict safeguards for data protection, algorithm security and content moderation, the company said.
Trump, in a post on his Truth Social account on Thursday, said that TikTok will now be owned by “a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice”.
The US president said that he was “so happy to have helped in saving TikTok”.
“I only hope that long into the future I will be remembered by those who use and love TikTok.”
ByteDance retains a 19.9 per cent stake in the joint venture – keeping its ownership below the 20 per cent threshold stipulated by the law.
Three investors – Silver Lake, Oracle and Abu Dhabi-based AI investment fund MGX – each hold 15 per cent stakes. Oracle’s executive chairman, Larry Ellison, is a longtime Trump ally.
Other investors include Dell Family Office, affiliates of Susquehanna International Group and General Atlantic, and several other investment firms.
The joint venture will retain decision-making authority over trust and safety policies and content moderation for US users, while TikTok’s global entities will manage international product integration and commercial activities including e-commerce and advertising.
The joint venture will be governed by a seven-member, majority-American board including TikTok CEO Chew Shou Zi and executives from major investment firms.
TikTok executive Adam Presser was appointed CEO of the new entity, with Will Farrell serving as chief security officer.
In his post, Trump also thanked Vice President JD Vance and members of his administration who helped bring the TikTok deal to a “very dramatic, final, and beautiful conclusion”.
Trump also thanked Chinese President Xi Jinping for working with the US and “ultimately approving the deal”.
“He could have gone the other way, but didn’t, and is appreciated for his decision.”
The 2024 law came as US policymakers, including Trump in his first presidency, warned that China could use TikTok to mine Americans’ data or exert influence through its algorithm.
But Trump, crediting the app for his appeal with young voters, delayed enforcement through successive executive orders, most recently extending the deadline to Jan 22.
Source: https://www.channelnewsasia.com/world/tiktok-bytedance-deal-us-joint-venture-avoid-ban-china-5877811