In a significant development, the joint venture tasked with acquiring TikTok's US business has been formally incorporated, and its leadership structure publicly announced, one day before the deadline set by former President Donald Trump for the divestiture of TikTok's US assets from its Chinese parent company, ByteDance. The closing of this transaction marks the end of an extensive process aimed at ensuring TikTok's continued operations in the United States and addressing longstanding national security concerns.
The newly constituted entity, majority-owned by American investors, will implement a series of measures to secure national interests. These include rigorous data protection protocols, fortification of the app's algorithm against external influence, dedicated content moderation processes, and software guarantees designed to shield data related to US users. These protective measures were highlighted in a statement issued by the joint venture on Thursday.
Leadership of the joint venture will be vested in CEO Adam Presser, who previously directed TikTok's initiatives to safeguard American user data domestically. Will Farrell has been appointed Chief Security Officer, responsible for oversight of privacy and security aspects within the organization. Governance includes a board comprising TikTok US CEO Shou Chew; Kenneth Glueck, Executive Vice President in Oracle's Office of the CEO; representatives from investment group Susquehanna International Group; and private equity firm Silver Lake, alongside UAE-based investor MGX, among others.
The complexity of TikTok's US regulatory situation dates back to the administration of President Trump, who initially threatened to ban the application during his first term. Regulatory pressure increased in 2024 when then-President Biden enacted legislation mandating the separation of the US version of TikTok from ByteDance or face prohibition within the country. Throughout Trump's second term, enforcement of this law was postponed repeatedly, as negotiations to transfer operational control to American ownership were pursued. Following approval of the acquisition agreement last autumn, a final closing deadline was set for January 23. The deal was signed in the preceding month.
This resolution is poised to benefit the app’s over 200 million American users, many of whom engage with TikTok as a source of entertainment, news, and economic opportunity. Under the terms of the agreement, management of TikTok’s US user data and primary US operations has shifted to a newly formed joint venture. This entity’s ownership is divided with approximately 50% held by a consortium including Oracle, private equity firm Silver Lake, and Emirati investment company MGX. Affiliates of existing ByteDance investors hold a combined stake exceeding 30%, while ByteDance retains a 19.9% share, as detailed in a memorandum from CEO Shou Chew to employees last month.
Operational changes include plans to retrain TikTok's algorithm specifically based on US user data, with Oracle entrusted to oversee data storage of American users. The US joint venture also assumes responsibility for content moderation applicable to US-generated content. Conversely, ByteDance will continue managing elements such as e-commerce, advertising, and marketing on the US platform, implying that consumer-facing aspects of the app will remain largely unchanged. Variations may emerge in the recommendation engine's functioning as ownership transitions influence algorithmic control.
The transaction was classified as a "qualified divestiture" under the US regulation that requires either sale or ban, a legal framework aiming to alleviate concerns about foreign influence. However, there remains scrutiny regarding whether this structure fully addresses the foundational national security issues that motivated bipartisan legislative action. US policymakers expressed apprehension that ByteDance might be compelled to manipulate TikTok's algorithm to propagate specific narratives or foment discord among American users.
Relevant legislation prohibits any collaborative operation of the content recommendation algorithm between ByteDance and the American owners. In response, the joint venture highlighted the importance of algorithm interoperability to deliver a global TikTok experience, enabling US creators to attain international visibility and allowing businesses to operate on a worldwide scale.
Under the finalized agreement, the joint venture will license the TikTok algorithm from ByteDance initially, followed by systematic retraining and review processes. Prior to closing, uncertainty persisted about whether Chinese authorities would authorize this arrangement, especially given TikTok's role in broader US-China trade discussions. Notably, earlier negotiations collapsed last year amid tariff escalations announced by Trump. To date, the Chinese government has not issued formal commentary on the ultimate design of the deal.