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TikTok’s U.S. operations will be housed in a new joint venture, according to a memo sent to employees by CEO Shou Zi Chew.
The entity is named TikTok USDS Joint Venture LLC, the memo said.
As part of the joint venture, Chew said in the memo, which was obtained by CNBC, that the company has signed agreements with the three managing investors: Oracle, Silver Lake, and Abu Dhabi-based MGX. Chew said that the deal’s “closing date” is Jan. 22.
Under a national security law, which the Supreme Court upheld in January, China-based ByteDance was required to divest TikTok’s U.S. operations or face an effective ban in the country. In September, President Donald Trump signed an executive order approving a proposed deal that would keep TikTok operational in the U.S. by meeting the requirements of a law originally signed by former President Joe Biden.
Chew noted that the new TikTok joint venture would be “majority owned by American investors, governed by a new seven-member majority-American board of directors, and subject to terms that protect Americans’ data and U.S. national security.”
The U.S. joint venture will be 50% held by a consortium of new investors, including Oracle, Silver Lake and MGX with 15% each; 30.1% held by affiliates of certain existing investors of ByteDance; and 19.9% will be retained by ByteDance, the memo said.
The TikTok chief said that the new joint venture will be responsible for protecting U.S. data, ensuring the security of its prized algorithm, content moderation and “software assurance.” He added that the joint venture will also “have the exclusive right and authority to provide assurances that content, software, and data for American users is secure.”
Besides being an investor, Oracle will be the new entity’s “trusted security partner” in charge of auditing and validating that it complies with “agreed upon National Security Terms,” the memo said.
Sensitive U.S. data will be stored in Oracle’s U.S.-based cloud computing data centers, Chew wrote.
The new TikTok entity will also be tasked with retraining the video app’s core content recommendation algorithm “on U.S. user data to ensure the content feed is free from outside manipulation,” the memo said.
Chew noted that TikTok global’s U.S. entities “will manage global product interoperability and certain commercial activities, including e-commerce, advertising, and marketing,” the memo said.
Under Trump’s executive order in September that approved the deal, the attorney general was blocked from enforcing the national security law for a 120-day period in order to “permit the contemplated divestiture to be completed,” allowing the deal to finalize by Jan 23.
Earlier in September, Trump signed a separate executive order that extended the TikTok deadline for the fourth time, giving ByteDance until Dec.16 to sell its U.S. TikTok business.
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