TLDR
- TikTok created a U.S. joint venture with Oracle (ORCL) and Silver Lake acquiring 50% combined ownership
- Adam Presser becomes CEO of TikTok’s U.S. operations while Shou Chew remains on the board
- ByteDance retains 19.9% ownership under the new TikTok USDS Joint Venture structure
- Oracle will host TikTok’s algorithm in its American data centers as part of security measures
- The deal prevents a ban and resolves five years of national security concerns over Chinese ownership
TikTok announced Thursday it formed a U.S. joint venture with Oracle and other American investors. The deal allows the video platform to continue serving 200 million users in the United States.
Oracle joins Silver Lake and MGX as managing investors in the new entity. Together, these three firms hold 50% ownership of TikTok’s U.S. operations.
The new company is called TikTok USDS Joint Venture. Adam Presser will serve as chief executive officer of the American business.
Presser worked at TikTok for almost four years leading operations and trust and safety. He previously held a senior role at Warner Bros before joining the platform.
TikTok CEO Shou Chew will sit on the board of directors. The venture operates as an independent entity with American majority control.
Oracle Data Centers to Host TikTok Algorithm
Oracle’s role extends beyond investment into operational infrastructure. TikTok’s content recommendation algorithm will move to Oracle’s U.S. data centers.
The algorithm will be retrained and updated using data from American users only. Oracle has been working with TikTok on cloud infrastructure since 2022.
The partnership gives Oracle a key position in one of the world’s most popular social media platforms. TikTok says the setup includes protections for data security and algorithm oversight.
ByteDance keeps 19.9% of the U.S. venture under the ownership structure. Other investors include Michael Dell’s Vastmere Strategic Investments, Alpha Wave Partners, Revolution, and Via Nova.
A seven-member board will oversee the joint venture with American members holding the majority. Board members include Timothy Dattels from TPG Global and Mark Dooley from Susquehanna International Group.
Silver Lake co-CEO Egon Durban, DXC Technology CEO Raul Fernandez, Oracle’s Kenneth Glueck, and MGX’s David Scott join Shou Chew on the board.
Deal Resolves Years of Regulatory Pressure
The agreement ends a lengthy dispute over national security concerns. A law signed by former President Joe Biden required ByteDance to sell U.S. operations or face a ban.
President Donald Trump issued executive orders blocking enforcement of the ban. These orders provided time for TikTok to arrange the joint venture deal.
Trump praised the agreement on Truth Social Thursday. He thanked Chinese President Xi Jinping for approving the transaction.
Vice President JD Vance said in September the U.S. business was valued at $14 billion. China has not released an official statement about the deal.
Reports indicate both U.S. and Chinese governments approved the final agreement. The deal was scheduled to close this week according to sources familiar with the matter.
The structure allows related apps like CapCut and Lemon8 to keep operating in America. U.S. creators maintain access to global audiences through the platform.
TikTok will manage global product connections and commercial activities including e-commerce and advertising. CEO Shou Chew informed employees about the U.S. entity name in December.
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