TikTok has finally reached a major turning point in its never-ending battle for survival in the United States. The company just announced a massive joint venture deal that could actually put an end to the threat of a nationwide ban on its Chinese properties.
TikTok’s US survival plan is taking shape
According to an internal memo obtained by AFP, TikTok CEO Shou Chew told his team that she and parent company ByteDance had reached an agreement to form a new company based in the US. There is a group of powerful investors behind this new joint venture. Oracle, Silver Lake and Abu Dhabi-based MGX are the key players and each will secure a 15 percent stake. Existing ByteDance investors will take just over 30 percent, leaving ByteDance with just under 20 percent – which is exactly the limit that US law allows for a Chinese company.
This entire setup is designed to comply with the 2024 law that basically tells ByteDance: sell the US operations or be banned. This ultimatum arose from deep concerns in Washington that China could use the app to spy on Americans or distort public opinion using the algorithm.
Under this new agreement, the US joint venture will take full control of the things that matter: privacy, algorithm security, content moderation and ensuring the security of the software for American users. Chew made it clear that this new company has sole authority to keep US user data locked down. Oracle, run by Larry Ellison – who is known to be close to Donald Trump – is expected to look after the technical infrastructure and keep a close eye on things.
Good news! Tiktok is not going back
For users, this means the app is probably not going anywhere. For creatives and businesses, it finally removes the uncertainty that has been hanging over them for years, threatening their revenues and marketing plans.
Politically, it is a classic compromise. It gives the US the control it wanted without forcing ByteDance into a total sale, which Beijing would never allow anyway. Trump has been pushing back the ban deadline for some time, most recently to January, and this deal closely resembles the framework the White House announced back in September.
However, the deal is not yet a done deal. Chew admitted there was still a lot of work to be done before the scheduled January 22 deadline and the Chinese government still needed to agree. Analysts also warn that control will not simply disappear. US regulators could still impose new rules on TikTok, and questions remain about how the algorithm works.
Nevertheless, experts see this as a big win for ByteDance. Staying in the US saves them from financial disaster and allows them to refocus on AI and perhaps even go public later. Currently, the future of TikTok in America looks more secure than it has in a long time – even if the discussions about it are not yet completely resolved.
