TikTok has launched a new US joint venture to address data security concerns while ensuring continued operations for its massive American user base. This move complies with a recent US Executive Order and positions ByteDance as the largest single shareholder.
Joint Venture Structure
TikTok announced the formation of TikTok US Data Security (USDS) Joint Venture LLC on Friday. Managing investors Silver Lake, Oracle, and MGX each hold 15 percent stakes, with ByteDance retaining 19.9 percent as the top shareholder. The entity operates independently under a seven-member board, majority American-led, including TikTok CEO Shou Chew.
Leadership and Investors
Adam Presser was appointed CEO of the joint venture by the board as its first action. Additional investors include Dell Family Office and Vastmere Strategic Investments, an affiliate of Susquehanna International Group. This builds on the existing TikTok USDS organization to serve over 200 million US users and 7.5 million businesses.
Data Security Measures
The joint venture will protect US user data in Oracle’s secure US cloud, retrain the content recommendation algorithm on US data, and implement software assurance protocols with ongoing source code reviews. It enforces robust trust and safety policies, content moderation, transparency reporting, and third-party cybersecurity audits.
Global Operations and China’s View
TikTok’s global US entities will handle product interoperability, e-commerce, advertising, and marketing. Chinese experts, including Zhou Mi from the Chinese Academy of International Trade and Economic Cooperation, hailed it as a pragmatic step from US-China consensus, benefiting users while addressing security concerns. China’s Ministry of Commerce and Foreign Affairs emphasized compliance with laws, fair business environments, and opposition to politicizing trade issues.
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