TikTok owner reaches joint venture deal to avert US ban

BBC
BBC
2h ago
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ByteDance and US investors formed a joint venture to keep TikTok operating in the US amid national security scrutiny.
TikTok owner reaches joint venture deal to avert US ban
A What happened
ByteDance, TikTok's parent company, has signed binding agreements to restructure TikTok’s US operations into a joint venture. The new ownership includes Oracle, Silver Lake, and Abu Dhabi's MGX holding significant shares, with ByteDance retaining 19.9%. This move comes after Congress passed a law mandating TikTok's sale to avoid a ban due to national security concerns. Oracle will license TikTok’s recommendation algorithm, which will be retrained on US user data to prevent external manipulation. The deal aims to maintain TikTok’s user base of over 170 million Americans. The agreement reflects US-China tensions and Congressional debate over user privacy and data protection.

Key insights

  • 1

    New ownership structure aims to address US national security concerns: The joint venture model with multiple US and global investors dilutes ByteDance’s control to reduce perceived security risks while preserving TikTok's market presence.

  • 2

    Algorithm licensing signifies a novel approach to data governance: Licensing TikTok's recommendation algorithm to Oracle and retraining it on US data represents an unprecedented regulatory effort to manage foreign tech influence over user content.

  • 3

    TikTok as a geopolitical bargaining chip in US-China relations: The deal embodies broader diplomatic tensions, where platform ownership is intertwined with trade and security negotiations, signaling calibrated de-escalation rather than outright concession.

Takeaways

This joint venture deal enables TikTok to continue serving US users while addressing key security concerns, but it faces scrutiny over privacy protections and effectiveness ahead of the January 2024 closure.

Topics

Technology & Innovation Artificial Intelligence World & Politics Policy & Regulation International Affairs

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