TikTok has reached a deal to form a joint venture that will allow it to continue operating in the US, five years after Donald Trump threatened to ban the social media platform over privacy and national security concerns. The move further strained relations with China.
ByteDance, TikTok’s Chinese owner, has signed a deal with Larry Ellison’s Oracle, the private-equity group Silver Lake and Abu Dhabi’s MGX. Under the arrangement, the joint venture will take over part of TikTok’s US business, including data protection, algorithm security and content moderation. However, TikTok’s chief executive, Shou Zi Chew, told employees in a memo that ByteDance would continue to run US operations, including its main revenue drivers such as e-commerce, advertising and marketing.
The deal ends five years of uncertainty over the future of TikTok in the US, where the platform has more than 130 million users. In 2020, during his first term as president, Trump issued an executive order threatening to ban the service to “safeguard the national security of the United States”. The US, which ordered ByteDance to sell TikTok’s US business, accused the platform of acting as a vehicle for the Chinese government to harvest data from American users. The company has consistently denied the allegations.
Under the new structure, Oracle, Silver Lake and MGX will each control 15%. Existing ByteDance investors will take 30.1%, while ByteDance will own 19.9% – the maximum permitted under US foreign ownership laws. The remaining 5% will be held by as-yet-unnamed new investors. The US joint venture will be overseen by a seven-member board of directors, the majority of whom will be American, according to Chew’s staff memo.
The deal is expected to close on 22 January, the day before a deadline set by Trump that would otherwise have resulted in the app being banned in the US. JD Vance, the US vice-president, said the deal would value TikTok’s US joint venture at $14bn. Ellison’s role has raised concerns about the decreasing share of media firms not controlled by pro-Trump billionaires, with Democratic senator Elizabeth Warren questioning whether the president struck “another backdoor deal”.
