TikTok — owned by China’s ByteDance — avoided a U.S. ban that was looming due to national security and data‑privacy concerns by forming a new majority American‑owned company to control its U.S. operations.
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The new entity is called TikTok USDS Joint Venture LLC with 80.1% American ownership and 19.9% retained by ByteDance.
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American investors involved include Oracle, Silver Lake, and Abu Dhabi‑based MGX, each holding about 15 % of the venture.
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The venture will be responsible for data storage, security, content moderation, and algorithm oversight of U.S. user activity.
🇺🇸 Why This Matters
This corporate restructuring effectively averts a nationwide ban in the U.S., allowing TikTok to keep operating for its ~200 million American users. The deal also has approval from both U.S. and Chinese authorities.
The move responds to a 2024 U.S. law requiring ByteDance to reduce Chinese control over TikTok’s U.S. assets or face delisting from app stores and restricted updates.
🔐 Data Security & Algorithm Changes
Under the joint venture, U.S. user data will be stored in Oracle’s secure cloud infrastructure, and the recommendation algorithm is expected to be retrained using American data to address security concerns.
🚨 Ongoing Concerns & Reactions
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Political scrutiny continues: California’s governor accused TikTok of suppressing content critical of former President Trump since the transition to new owners, prompting an official review.
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User backlash: Some American users reportedly deleted the app in higher numbers after the ownership change, reflecting dissatisfaction with the restructuring and privacy concerns.
📊 Broader Context
This resolution comes after years of legal and political debate over TikTok’s presence in the U.S., which included court challenges, legislative mandates, and extended deadlines for divestiture.