ByteDance finalized a deal to create a new U.S. entity for TikTok, effectively averting a potential ban and concluding a six-year political battle that began in 2020. The agreement involves forming a majority American-owned joint venture, TikTok USDS Joint Venture LLC, with a group of non-Chinese investors.

The ownership structure sees Oracle, Silver Lake, and MGX, an Abu Dhabi-based investment company, each holding a 15% stake in the new venture. Michael Dell's family investment firm, along with other smaller investors, also participated in the deal. Adam Presser, formerly TikTok's head of operations and trust and safety, will assume the role of CEO of TikTok USDS Joint Venture LLC, while TikTok CEO Shou Chew will serve as a director on the board. The joint venture will be governed by a seven-member board, including Timothy Dattels of TPG Global and Mark Dooley of Susquehanna International Group, in addition to Chew.

This restructuring addresses long-standing national security concerns that arose during President Trump's administration, which attempted to ban the app due to data privacy worries. TikTok USDS Joint Venture will operate under defined safeguards encompassing comprehensive data protections, algorithm security, content moderation, and software assurances for U.S. users.

The creation of TikTok USDS Joint Venture marks a significant shift in the social media landscape. By establishing an independent entity with majority American ownership, TikTok aims to reassure U.S. regulators and users about data security and operational transparency. The involvement of established investment firms like Oracle and Silver Lake lends further credibility to the venture.

Looking ahead, the success of TikTok USDS Joint Venture will depend on its ability to navigate the complex regulatory environment and maintain user trust. The company will need to demonstrate its commitment to data security and content moderation while continuing to innovate and engage its user base. The new structure also sets a precedent for other foreign-owned tech companies operating in the U.S., potentially leading to similar arrangements to address national security concerns.