We have talked a lot about how this moment had to come, if TikTok wanted to continue operating in the United States. So it’s time to celebrate (to say something, since there are winners and losers depending on how you view the operation). But before popping the champagne from the fridge, let us explain everything about the matter.
The joint venture acquiring TikTok’s U.S. assets has been officially established and has announced its management team, according to the company, one day before the deadline set by President Donald Trump for the Chinese parent company ByteDance to divest itself of the U.S. assets of the app.
There was a choice between closure or sale: they chose sale
The closing of the transaction ends a multi-year effort to ensure TikTok’s long-term future in the United States and to dispel concerns that it posed a risk to national security.
“The joint venture, predominantly U.S.-owned, will operate under defined guarantees that protect national security through comprehensive data protections, algorithm security, content moderation, and software guarantees for U.S. users,” the group stated in a statement on Thursday.
The joint venture will be led by CEO Adam Presser, who previously led TikTok’s efforts to protect the data of American users in the United States, and security director Will Farrell, who oversaw privacy and security for the initiative.
It will be supervised by a council that includes TikTok’s CEO in the United States, Shou Chew; Kenneth Glueck, Executive Vice President of the Office of the CEO of Oracle; and representatives from the investment firm Susquehanna International Group and the private equity firm Silver Lake, the Emirati investment firm MGX, among others.
Trump thanked Chinese President Xi Jinping for “working with us and ultimately approving the deal. He could have done otherwise, but he didn’t, and his decision is appreciated,” Trump said in his post on Truth Social.
Who benefits from this agreement? American companies
The agreement is likely good news for the more than 200 million TikTok users in the U.S., many of whom rely on the app for entertainment, information, and, in some cases, even to make a living.
The agreement transferred the control of data from U.S. TikTok users and most of its operations in the United States to a new joint venture, 50% of which will be owned by a consortium of investors formed by the tech company Oracle, the private equity firm Silver Lake, and the investment firm MGX, backed by the United Arab Emirates.
Más del 30% de la empresa conjunta estará en manos de “afiliados de ciertos inversores existentes en ByteDance”, y el 19.9% permanecerá en manos de ByteDance, según un memorando que Chew envió a los empleados el mes pasado.
The new entity plans to retrain TikTok’s algorithm with data from U.S. users, and Oracle will oversee the storage of U.S. users’ data. The U.S. joint venture will also be responsible for content moderation for U.S. users.
However, the global entity TikTok controlled by ByteDance will continue to manage e-commerce, advertising, and marketing on the new U.S. platform, according to Chew’s memorandum.
This means that it is unlikely that the experience of U.S. users in the app will change visibly, although the algorithm that determines which videos are shown in their feeds may change as the new ownership group takes control.
