TikTok has formalized an agreement to establish a dedicated United States business unit in response to longstanding apprehensions regarding its continued operation within the country. The company entered into partnerships with significant investors including Oracle, Silver Lake, and MGX to create a new joint venture entity, which will be responsible for overseeing TikTok's operations on American soil.
This new structure will be governed by stringent safeguards aimed at protecting national security. According to the company's statement issued on Thursday, these safeguards encompass comprehensive data protection mechanisms, heightened algorithmic security, reassessed content moderation practices, and software assurances specifically tailored to safeguard the interests of US users.
The existing TikTok app will remain accessible to users in the United States, ensuring uninterrupted service. Leadership of the newly formed venture will be under Adam Presser, a seasoned executive formerly heading TikTok's operations and trust and safety sectors. Presser will serve as CEO and collaborate with a board of directors consisting of seven members, predominately American, which includes TikTok’s current CEO, Shou Chew.
This development brings resolution to years of uncertainty broiling over TikTok's future in the United States. The passage of bipartisan legislation, subsequently signed by President Joe Biden, authorized a prohibition on TikTok’s operations domestically unless it divested from its Chinese parent company, ByteDance, by January 2025. There was a brief period during which TikTok was inaccessible following the deadline; however, on his first day in office, then-President Donald Trump issued an executive order that permitted the platform to continue operating whilst negotiations were underway for a structural reorganization of ownership.
An integral component of the joint venture’s strategy is the localized management of user data. U.S.-based user information will be stored within Oracle-operated infrastructure, ensuring geographic and administrative control. The company plans to retrain, test, and update TikTok’s recommendation algorithm solely on U.S. user data, aiming to reinforce transparency and control over the content personalization process.
Oracle, Silver Lake, and the Emirati investment company MGX have each committed to a 15% ownership stake in the joint venture, serving as managing partners. Additional shareholders include an investment firm affiliated with Michael Dell, founder of Dell Technologies. Despite the restructuring, ByteDance will retain a 19.9% minority stake in the new joint venture.