TikTok has officially announced a significant restructuring of its U.S. operations, forming a new joint venture, TikTok USDS Joint Venture LLC, to ensure its continued presence in the American market. This move comes after extensive negotiations and addresses national security concerns that have loomed over the popular short-form video platform.
Adam Presser, previously TikTok’s head of operations and trust and safety, has been appointed as the Chief Executive Officer of the new U.S. entity. Presser brings nearly four years of experience at TikTok and a background as a senior executive at Warner Bros. to his new role. Shou Chew, the current CEO of TikTok, will serve as a director of the newly formed venture, which is slated to operate as an independent organization.
According to the company’s statement, TikTok USDS Joint Venture will be governed by stringent safeguards designed to protect national security. These measures encompass comprehensive data protection protocols, secure algorithm management, robust content moderation, and rigorous software assurances for U.S. users.
The agreement has been met with public approval from former President Donald Trump, who described the new ownership as a consortium of “Great American Patriots and Investors, the Biggest in the World.” He also expressed his appreciation to Chinese President Xi Jinping for his cooperation in finalizing the deal.
The new venture will be overseen by a seven-member board of directors, with a majority of American representation. Key figures on the board include Timothy Dattels of TPG Global, Mark Dooley of Susquehanna International Group, Egon Durban, co-CEO of Silver Lake, Raul Fernandez, CEO of DXC Technology, Kenneth Glueck of Oracle, and David Scott of MGX.
ByteDance, TikTok’s Chinese parent company, will retain a 19.9% stake in the new U.S. joint venture. Silver Lake, Oracle, and MGX are positioned as the primary managing investors. Additional financial backing comes from Michael Dell’s investment firm, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, and General Atlantic affiliate Via Nova.
This development is set against the backdrop of a national security law, initially proposed under former President Joe Biden’s administration, which mandated that ByteDance divest its U.S. operations or face a potential ban. While executive orders signed by former President Donald Trump last year temporarily halted enforcement of this law, allowing time for negotiations, the current agreement appears to resolve these long-standing issues.
The joint venture is structured to ensure interoperability, enabling TikTok U.S. users to experience a global platform while allowing U.S. creators to gain wider reach and businesses to operate on an international scale. TikTok Global’s U.S. entities will be responsible for managing global product interoperability and overseeing key commercial activities such as e-commerce, advertising, and marketing.
A crucial aspect of the new arrangement involves the relocation and management of TikTok’s proprietary content-recommendation algorithm. This algorithm will be hosted within Oracle’s data centers in the United States, where it will undergo retraining, testing, and updates using U.S. user data. This structural change also facilitates the continued operation of associated applications like CapCut and Lemon8, along with other unspecified services and websites, within the U.S. market.
While the Chinese government has not issued an official public statement, reports indicate that both the U.S. and Chinese governments have given their approval for the transaction, with the deal expected to close imminently. This resolution follows earlier discussions where former President Trump had indicated that Chinese President Xi Jinping had agreed to proceed with a proposed deal, which was later formalized through an executive order. At that time, U.S. Vice President JD Vance noted some initial resistance from the Chinese government regarding the valuation of TikTok’s U.S. business, which was reportedly pegged at $14 billion.
In December, TikTok CEO Shou Chew informed employees about the formation of the new U.S. joint venture, signaling a significant step towards solidifying the platform’s future in the United States.
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