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Details of TikTok Transaction Surface with Pact to Establish U.S. Joint Venture

Axios, The Associated Press, and Reuters. TikTok’s CEO Shou Zi Chew mentioned in the memo that the transaction is expected to finalize on January 22. Reports indicate that Oracle, Silver Lake, and MGX are three significant investors in the TikTok U.S. venture (TikTok USDS Joint Venture LLC), collectively owning a 45% stake (15% each). ByteDance is set to retain a 19.9% interest in the newly formed entity, while nearly 30.1% will be allocated to current ByteDance investors. The identities of the remaining investors remain uncertain.

TikTok U.S. will feature a board of directors consisting of seven members, six of whom will be American. ByteDance will occupy the remaining seat. The new entity will store U.S. user data on servers operated by Oracle. The algorithm driving the new application will be re-trained using U.S. user data to “guarantee that the content feed is free from external influence.” TikTok U.S. will also take charge of content moderation on the platform.

While TikTok U.S. manages user data, the new algorithm, content moderation, and software security, revenue collection will still be under ByteDance’s purview. A segment of that revenue will be distributed to the U.S. venture, although specific numbers have not been disclosed. Additionally, the amount Oracle, Silver Lake, and MGX are investing for their shares of TikTok U.S. is still unknown. The new enterprise is projected to be valued at approximately $14 billion, based on figures cited by Vice President JD Vance in September.