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After years of uncertainty, ByteDance's TikTok has finally completed the deal to spin off its U.S. operations from its Chinese parent company. In regard to the deal, a joint venture, called “TikTok USDS Joint Venture LLC”, was restructured to handle the U.S. operations.
Oracle, Silver Lake, and MGX (an Abu Dhabi-based investment firm) are the investors that are compiled in the new joint venture, and each of the investors holds about 15% of the new company, with Oracle playing a central role in managing U.S. user data and cybersecurity.
ByteDance will retain a minority stake (that's about 19.9% of the U.S. entity) under the new structure. For more details about how the new venture is restructured, read this article.
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| ByteDance, TikTok's Parent Company |
The completion has just ended a multi-year fight between TikTok, the U.S. government, and China over national security concerns about Chinese ownership and access to American user data. Under the administration of former president Joe Biden in 2024, Congress passed a law requiring TikTok to divest its U.S. operations or face a full ban, and that law was upheld by the Supreme Court.
Now, the new U.S. venture will operate with defined safeguards for data protection. U.S. user data will be stored and processed under U.S. jurisdiction. Oracle and other investing companies that made the venture will work on algorithm security, content moderation, and software assurances to address the national security issues cited by the American lawmakers.
Even for the deal to have a successful completion, President Donald Trump repeatedly extended deadlines and issued executive orders to allow negotiations to proceed. Of course, this ultimately paved the way for the finalised deal. Now that years of political pressure and legal battles over TikTok has been resolved, the short-video sharing app will stay in the U.S. for good.
