• TikTok has formed a majority American-owned joint venture to avoid a U.S. ban.
• The new entity, TikTok USDS Joint Venture LLC, will control user data and algorithms.
• Major investors include Oracle, Silver Lake, and MGX, collectively holding 80.1% stake.

TikTok's Chinese owner, ByteDance, finalized a deal to establish a new majority American-owned joint venture, TikTok USDS Joint Venture LLC, to secure its future in the U.S., where over 200 million users access the app. This decision comes after extensive negotiations and aims to address national security worries that have gripped TikTok since 2020, when former President Trump sought unsuccessfully to ban the app due to these concerns, according to Channel News Asia and Reuters.

The joint venture is expected to ensure robust protections for U.S. user data, applications, and algorithm management, thus adhering to data privacy and cybersecurity measures required amidst ongoing scrutiny. Investor confidence is bolstered by the involvement of significant stakeholders such as Oracle, Silver Lake, and Abu Dhabi-based MGX, who will hold a total of 80.1%, leaving ByteDance with a 19.9% stake, according to South China Morning Post and India Times.

This agreement signifies an important milestone following years of political pressure, particularly under the Biden administration, which mandated that ByteDance divest its U.S. operations or face potential bans. The venture will function as an independent entity with governance by a newly established board consisting of a majority of American directors, thus addressing critical security issues while keeping TikTok's business model intact, as highlighted in statements from TikTok's CEO and industry reports according to South China Morning Post and India Times.