TikTok reaches deal for new US joint venture to avoid American ban
TikTok owner ByteDance will hold a 19.9% stake in the joint venture to keep US operations running.
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WASHINGTON: TikTok's Chinese owner, ByteDance, finalised a deal on Thursday (Jan 22) to set up a majority American-owned joint venture company to avoid a US ban on the popular social media app used by more than 200 million Americans.
The deal is a milestone for the short video app after years of battles that began in August 2020, when President Donald Trump first tried unsuccessfully to ban the app over national security concerns.
TikTok USDS Joint Venture LLC will secure US user data, apps and the algorithm through data privacy and cybersecurity measures, the company said.
The joint venture will "retrain, test and update" the content recommendation algorithm on US user data. The content recommendation algorithm will be secured in Oracle's US cloud environment, the company said in a statement.
The agreement provides for American and global investors, including cloud computing giant Oracle, private equity group Silver Lake and Abu Dhabi-based MGX, to hold a stake of 80.1 per cent in the new joint venture, while ByteDance will retain 19.9 per cent.
The three managing investors - Silver Lake, Oracle and MGX - each hold 15 per cent.
Silver Lake Technology Management is an American global private equity firm focused on technology and technology-enabled investments. Silver Lake is headquartered in Menlo Park and New York City.
MGX describes itself as a firm "born in the UAE" that mainly invests in AI and advanced technology.
Completing the full consortium of investors are: Dell Family Office, Vastmere Strategic Investments, Alpha Wave Partners, Revolution, Merritt Way, Via Nova, Virgo LI and NJJ Capital, the family office of Xavier Niel, a French entrepreneur and pioneer in telecommunications.
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