Chinese-owned video platform TikTok has sealed a deal to create a joint venture with American investors. The move allows the popular social app to dodge the threat of being banned in the US.
TikTok has set up a majority American-owned joint venture to secure its US operations, averting a ban on the short video app over its Chinese ownership.
The TikTok USDS Joint Venture LLC will cater to more than 200 million users and 7.5 million businesses, securing user data, apps and algorithms through data privacy and cybersecurity measures, ByteDance — the social media platform’s parent company, which is based in China — said on Thursday.
The deal is the culmination of a years-long saga that saw TikTok being caught in the crosshairs of geopolitical tensions between the US and China.
TikTok’s woes began in August 2020, when US President Donald Trump tried to ban the video-sharing app over national security concerns during his first stint in office.
US lawmakers had long suspected ByteDance of passing sensitive user data of US citizens to China.
There were also allegations that Beijing used TikTok’s algorithm to spread propaganda and disinformation, even when users do not actively select such content.
In 2024, former President Joe Biden’s administration passed a law, mandating a ban on new TikTok downloads on Apple or Google app stores if ByteDance fails to divest the site by January 2025.
But as soon as Trump returned to the oval office that month, he signed executive orders extending the deadline and postponing a potential ban.
He went on to give the company three more extensions last year.
On Thursday, Trump welcomed TikTok’s deal — and claimed credit for it.
“I am so happy to have helped in saving TikTok!” Trump wrote in a post on his Truth Social late Thursday.
“It will now be owned by a group of Great American Patriots and Investors, the Biggest in the World, and will be an important Voice.”
The US leader also thanked Chinese President Xi Jinping for approving the agreement.
“I would also like to thank President Xi, of China, for working with us and, ultimately, approving the Deal,” he said.
The agreement foresees American and global investors to holding 80.1% of the venture while ByteDance will own 19.9%.
The new joint venture’s three managing investors are cloud computing giant Oracle, private equity group Silver Lake and Abu Dhabi-based investment firm MGX. They will each hold 15% stakes.
Other investors include Dell Family Office, affiliates of Susquehanna International Group and General Atlantic.
