TikTok has finalized an agreement to separate its US business into a newly formed company controlled by American investors, according to an internal company memo first reported Thursday by Axios.
The arrangement is expected to bring to a close a protracted battle between TikTok and Washington that has unfolded over several years, driven by US government demands that ByteDance, the app’s China-based parent company, relinquish control of its American operations due to national security concerns.
In a message to employees, TikTok CEO Shou Chew said the transaction is scheduled to be completed on January 22. The new company will operate under the name TikTok USDS Joint Venture LLC. Under the ownership structure outlined in the memo, Oracle, Silver Lake, and Abu Dhabi-based MGX will together control 45 percent of the venture. Affiliates of existing ByteDance investors will retain close to one-third of the company, while ByteDance itself will hold just under a 20 percent stake.
According to Axios, the US-based entity will assume full authority over sensitive areas including data security, protection of the algorithm, content moderation, and software integrity. The memo states that the company will place special emphasis on “retraining the content recommendation algorithm on U.S. user data to ensure the content feed is free from outside manipulation.”
The document also notes that a “trusted security partner” will be tasked with auditing and verifying compliance with US national security requirements. Oracle is set to take on that role once the divestment is finalized.
The agreement follows legislative action taken shortly before Joe Biden left office, when he signed a law mandating a ban on TikTok if ByteDance failed to divest its US assets. President Donald Trump, meanwhile, has issued multiple executive orders aimed at keeping the platform operating while negotiations moved forward.
Trump had previously backed a TikTok ban during his first term but later reversed course, promising to “save TikTok” during his campaign. He has credited the platform with helping him connect with younger voters and boost support in his victory over Democrat Kamala Harris in the November 2024 presidential election.
{Matzav.com}
