TikTok has recently changed ownership in the US, but what will happen next?
TikTok has recently changed ownership in the US, but what will happen next?
Just over a year after it was momentarily removed from app stores, TikTok in the US is now integrated into a newly established entity, TikTok USDS Joint Venture LLC. With authorization from the US and China approaching the timeline outlined in December, ByteDance’s stake in the new joint venture is now only 19.9 percent to comply with the divest-or-ban legislation signed into law in 2024 by President Biden. The remaining 80.1 percent is held by investment firms Silver Lake, Oracle, and the Abu Dhabi-based MGX — these three “managing investors” currently possess 15 percent stakes each — alongside several smaller investors, including Michael Dell’s family investment firm.
A press statement confirming the deal’s completion did not disclose the cost of those stakes or provide information on the possible introduction of a new app in the US. However, it was stated that the joint venture’s management of “extensive data protections, algorithm security, content moderation, and software guarantees for U.S. users” will cover TikTok, the video editor CapCut, Lemon8, and “a range” of other applications and services.
At this stage, most of the information pertains to the joint venture’s board of seven members, which includes TikTok US CEO Shou Zi Chew, along with its initial executive appointments, such as TikTok’s former head of operations and trust and safety, Adam Presser, who has been designated as CEO.
Interoperability allows the Joint Venture to deliver a global TikTok experience to U.S. users, ensuring that American creators can gain visibility and businesses can function on an international level. TikTok global’s U.S. entities will oversee global product interoperability as well as specific commercial operations, encompassing e-commerce, advertising, and marketing.
The mission of TikTok USDS Joint Venture is to protect U.S. user data, applications, and algorithms through thorough data privacy and cybersecurity protocols. It aims to maintain the U.S. content ecosystem with strong trust and safety measures and content moderation while ensuring ongoing responsibility via transparency reporting and independent certifications.
Data Protection: U.S. user data will be secured by USDS Joint Venture within Oracle’s secure U.S. cloud framework. The Joint Venture will operate a complete data privacy and cybersecurity initiative that is subject to audits and certifications by external cybersecurity specialists. This program will comply with key industry standards, including the National Institute of Standards and Technology (NIST) CSF and 800-53, ISO 27001, and the Cybersecurity & Infrastructure Security Agency (CISA) Security Requirements for Restricted Transactions.
Algorithm Security: The Joint Venture will retrain, assess, and refresh the content recommendation algorithm based on U.S. user data. This algorithm will be secured within Oracle’s U.S. cloud environment.
Software Assurance: The Joint Venture will secure U.S. applications through software assurance procedures and will continuously review and verify source code, supported by its Trusted Security Partner, Oracle.
Trust & Safety: The Joint Venture will ensure the integrity of the U.S. content ecosystem and will possess decision-making authority regarding trust and safety policies and content moderation.
The TikTok USDS Joint Venture comprises three managing investors: Silver Lake, Oracle, and MGX, each holding a 15% share. The complete consortium of investors includes: the Dell Family Office, founded by Michael Dell, Chair and CEO of Dell Technologies; Vastmere Strategic Investments, LLC, linked to Susquehanna International Group, LLP; Alpha Wave Partners; Revolution; Merritt Way, LLC, managed by Dragoneer partners; Via Nova, connected to General Atlantic; Virgo LI, Inc., the investment branch of a foundation set up by Yuri and Julia Milner in support of scientific endeavors; and NJJ Capital, the family office of telecommunications entrepreneur Xavier Niel. ByteDance retains a 19.9% interest in the Joint Venture.
