The TikTok Agreement is Officially Finalized
Just over a year after vanishing from app stores, TikTok in the US has reemerged as part of a new entity called TikTok USDS Joint Venture LLC. With approvals from both the US and China aligning with the timeline set in December, ByteDance now holds only 19.9% of this joint venture to comply with the divest-or-ban law enacted in 2024 by President Biden. The remaining 80.1% is owned by investment firm Silver Lake, Oracle, and Abu Dhabi’s MGX, which are the three “managing investors” each holding 15% stakes, along with several smaller investors, including Michael Dell’s family investment firm.
A press release announcing the completion of the deal didn’t disclose the financial details of these stakes or any plans for launching a new app in the US. However, it did mention that the joint venture will oversee “comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users,” which will extend to TikTok, the video editor CapCut, Lemon8, and a range of other apps and services.
Currently, the focus is on the joint venture’s seven-member board, which includes TikTok US CEO Shou Zi Chew, and its initial executive appointments, with Adam Presser, TikTok’s former head of operations and trust and safety, stepping in as CEO.
TikTok USDS:
> Interoperability allows the Joint Venture to deliver a global TikTok experience for U.S. users, ensuring that U.S. creators gain visibility and businesses can thrive on an international scale. TikTok global’s U.S. entities will manage global product interoperability and various commercial activities, including e-commerce, advertising, and marketing.
> The mandate of TikTok USDS Joint Venture is to protect U.S. user data, apps, and the algorithm through extensive data privacy and cybersecurity measures. It aims to maintain the integrity of the U.S. content ecosystem with strong trust and safety policies and content moderation, ensuring ongoing accountability through transparency reporting and third-party certifications.
> Data Protection: U.S. user data will be safeguarded by the USDS Joint Venture within Oracle’s secure U.S. cloud environment. The Joint Venture will implement a thorough data privacy and cybersecurity program, audited and certified by independent cybersecurity experts, adhering to major industry standards such as 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, test, and update the content recommendation algorithm using U.S. user data, ensuring its security within Oracle’s U.S. cloud environment.
> Software Assurance: The Joint Venture will protect U.S. apps through software assurance protocols, continuously reviewing and validating source code with the help of its Trusted Security Partner, Oracle.
> Trust & Safety: The Joint Venture will protect the U.S. content ecosystem and hold decision-making authority over trust and safety policies and content moderation.
> TikTok USDS Joint Venture is backed by three managing investors—Silver Lake, Oracle, and MGX—each with a 15% stake. The full consortium of investors also includes: Dell Family Office, the investment firm of Michael Dell, Founder, Chairman, and CEO of Dell Technologies; Vastmere Strategic Investments, LLC, an affiliate of Susquehanna International Group, LLP; Alpha Wave Partners; Revolution; Merritt Way, LLC, managed by partners of Dragoneer; Via Nova, an affiliate of General Atlantic; Virgo LI, Inc., the investment arm of a foundation established by Yuri and Julia Milner to support science; and NJJ Capital, the family office of Xavier Niel, a French entrepreneur and telecommunications pioneer. ByteDance retains a 19.9% stake in the Joint Venture.
