Daijiworld Media Network - Washington
Washington, Dec 19: TikTok CEO Shou Chew on Thursday informed employees that the app’s Chinese parent company, ByteDance, has signed binding agreements to establish a joint venture for TikTok in the United States, in line with a deal reached with the Trump administration.
According to an internal memo obtained by NBC News, the agreement will result in the US version of TikTok becoming majority-owned by American investors. The investors include US tech giant Oracle, California-based private equity firm Silver Lake, and Abu Dhabi-based investment company MGX.
While Silver Lake and MGX did not immediately respond to requests for comment, Oracle declined to comment on the development. However, Oracle’s shares surged by more than 5 per cent in after-hours trading following the news. The White House and the US Treasury Department also did not respond to queries.
An employee who received the memo said the response among TikTok’s US staff was largely positive, though many employees in Asia and Europe were yet to review or react to the announcement.
As part of the arrangement, TikTok US will be governed by a new seven-member board of directors, with a majority of American members. Chew said the US joint venture will take responsibility for data protection, algorithm security, content moderation and software assurance for American users.
“The US joint venture will have the exclusive right and authority to provide assurances that content, software and data for American users is secure,” Chew stated in the memo.
The move follows a “framework” agreement reached in September between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, paving the way for American investors to take control of TikTok’s US operations.
TikTok’s prolonged legal and political challenges in the US stem from bipartisan concerns in Congress and warnings from the intelligence community over ByteDance’s links to the Chinese government, which were viewed as potential national security risks.
US lawmakers have raised alarms about the vast amount of personal data TikTok collects from millions of American users daily and how that information could potentially be accessed or misused.
These concerns led to bipartisan legislation in 2024 mandating ByteDance to divest majority ownership of TikTok’s US business or face a nationwide ban. The ban was initially set to take effect in January 2024.
In January, ahead of Donald Trump’s return to office as president, the US Supreme Court upheld the law, rejecting TikTok’s argument that an outright ban would violate free speech protections under the Constitution.