TikTok, US business divestment and new joint venture announced

The new company, operationally speaking, will have data management and protection such as the re-training of US user-based algorithms entrusted to Oracle, previously the data custodian of TikTok USA. That is, it will license the controversial algorithm now in the hands of ByteDance and re-train it for testing and updates. The joint venture, says the press release announcing it, will ensure 'the content ecosystem in the US' through 'decision-making authority over security policies and content moderation'.

However, the controversy has not gone away: ByteDance still retains a significant share and presence in US assets in the eyes of critics, including US Congressmen who fear for national security. The Financial Times also pointed out that the Chinese giant will still have important business ties with the US joint venture including direct control of the main business lines in the country, the 'core' consisting of ecommerce, advertising and marketing. Sources revealed to the Ft that numerous employees in the US will actually remain employed by divisions under ByteDance, now valued at USD 500 billion.

The launch press release of the new TikTok USDS also reveals the composition of the board that will govern the entity, seven mostly US members. There will be the CEO of global TikTok, Shou Chew, but alongside him will be Timothy Dattels of TPG Global, Mark Dooley of Susquehanna International Group, Egon Burban co-CEO of Silver Lake, Raul Fernandez, ceo of DXC Technology, Kenneth Glueck, top executive of Oracle, and David Scott of MGX.

The joint venture's top management will be headed by CEO Adam Presser, a long-time close associate of Shou Chew at TikTok after a stint at WarnerMedia. Will Farrell, himself a veteran of TikTok and Booz Allen Hamilton, will be chief security officer.

The crisis surrounding TikTok, which now boasts 200 million users in the US, has dragged on for six years and saw Congress pass a bill in 2024 to ban it in the US in the face of national security concerns related to Chinese ownership. Trump, once a critic, has however become a devotee of social, to which he attributes part of his electoral success among young people. He has also been pushed by American financiers who are his supporters and have interests in ByteDance. He has thus suspended the implementation of the legislation, citing ongoing negotiations to resolve the matter. And he entrusted Vice President JD Vance with focusing on the details of a settlement. Vance indicated that the deal, now finalised, would value the new US joint venture at USD 14 billion. In the past, TikTok's US assets have been valued at between 35 and 50 billion.