In a move that has garnered significant attention, TikTok has finalised a deal that will allow the popular short-video app to continue operating in the United States. This development comes after a prolonged tussle between Washington and Beijing, which began during former President Donald Trump’s administration when he unsuccessfully attempted to ban the app over national security concerns.
The deal, which was initially floated in 2020 and has now been finalised, will see the creation of a new business entity called TikTok USDS Joint Venture LLC. This entity will be responsible for securing the data of TikTok’s American users and overseeing the retraining of the app’s powerful content recommendation algorithm.
Under the agreement, Oracle, a cloud computing giant, will be responsible for securing the data of TikTok’s US users and overseeing the retraining of the app’s algorithm. Additionally, Silver Lake, a US tech investment firm, and MGX, an Emirati investor in AI and technology, will each hold a 15% stake in the new joint venture.
ByteDance, TikTok’s Chinese parent company, will retain a 19.9% stake in the business, while the remaining 35.1% will be owned by a group of companies, including the family office of tech executive Michael Dell, another Trump supporter, and Susquehanna International Group, a firm co-founded by Trump ally Jeff Yass.
The deal has been welcomed by former President Trump, who stated that he was “so happy to have helped in saving TikTok.” However, the impact of this shift on the millions of American TikTok users remains to be seen. Experts suggest that the app might operate differently from the global version, with a slower and lighter app that may not recommend content as successfully as the current platform.
This landmark deal represents a significant development in the ongoing saga surrounding TikTok’s operations in the United States. As the app continues to navigate the complex landscape of geopolitics and data privacy, the success of this new joint venture will be closely watched by both users and policymakers alike.
